Genetic screens in Drosophila have identified regulators of endocytic trafficking as neoplastic tumor suppressor genes. For example, Drosophila endosomal sorting complex required for transport (ESCRT) mutants lose epithelial polarity and show increased cell proliferation, suggesting that ESCRT proteins could function as tumor suppressors. In this study, we show for the for the first time to our knowledge that ESCRT proteins are required to maintain polarity in mammalian epithelial cells. Inhibition of ESCRT function caused the tight junction protein claudin-1 to accumulate in intracellular vesicles. In contrast E-cadherin and occludin localization was unaffected. We investigated the cause of this accumulation and show that claudin-1 is constitutively recycled in kidney, colon, and lung epithelial cells, identifying claudin-1 recycling as a newly described feature of diverse epithelial cell types. This recycling requires ESCRT function, explaining the accumulation of intracellular claudin-1 when ESCRT function is inhibited. We further demonstrate that small interfering RNA knockdown of the ESCRT protein Tsg101 causes epithelial monolayers to lose their polarized organization and interferes with the establishment of a normal epithelial permeability barrier. ESCRT knockdown also reduces the formation of correctly polarized three-dimensional cysts. Thus, in mammalian epithelial cells, ESCRT function is required for claudin-1 trafficking and for epithelial cell polarity, supporting the hypothesis that ESCRT proteins function as tumor suppressors.