Wnt5a regulates planar cell polarity in epithelial cells, but it remains to be determined whether Wnt5a and its receptors are sorted apically or basolaterally, and how Wnt5a signaling is involved in apical and basolateral polarization. We found that Wnt5a was secreted basolaterally in polarized kidney epithelial cells. The basolateral secretion of Wnt5a required Wntless (Wls), clathrin and adaptor protein 1 (AP-1). Wnt5a receptors were also localized to the basolateral membranes, but their sorting did not require Wls. Wnt5a-induced signaling was stimulated more efficiently at the basolateral side than the apical side of epithelial cells. Knockdown of Wnt5a delayed apical lumen formation of the epithelial cyst, and these phenotypes were rescued by wild-type Wnt5a, but not by a Wnt5a mutant that is secreted apically. Although apoptosis was not required for apical lumen formation in a wild-type cyst, apoptosis was necessary for eliminating luminal cells in a Wnt5a-depleted cyst. These results suggest that Wnt5a and its receptors are sorted to their correct destination by different mechanisms and that the basolateral secretion of Wnt5a is necessary for apical lumen formation in the epithelial cyst.