Autosomal dominant polycystic kidney disease (ADPKD) cystogenesis has been extensively studied and major characteristic abnormalities were identified including increased proliferation, apoptosis, changes in cellular polarity, abnormal matrix composition and fluid secretion. We set out to understand how mutated polycystin-1 leads to these abnormalities and how well mechanisms of cystogenesis in vivo can be understood using in vitro models. Specifically, we addressed the dynamic role of polycystin-1 in the context of cellular rearrangements accompanying cystogenesis and tubulogenesis in vitro. We demonstrated that polycystin-1 plays an important role in cell-cell adhesion through homophilic interactions of its Ig-like domains. To define the role of polycystin-1 in formation of intercellular contacts and cell polarity during epithelial morphogenesis, we have utilized a 3D MDCK in vitro model of tubulogenesis and cystogenesis. We demonstrate that polycystin-1 is a component of desmosomal junctions of epithelial cells. A striking down-regulation of polycystin-1 mRNA was detected in cysts as compared to tubules, leading to altered protein expression and localization. While polycystin-1 is localized to basolateral membranes of MDCK tubules, it is only detected in cytoplasmic pools in cystic cells. To address the impact of mutated PC-1 on intercellular adhesion, we have analyzed the structure/function of desmosomal junctions in primary cells derived from ADPKD cysts. We demonstrated that, in the absence of functional polycystin-1, desmosomal junctions can not be properly assembled and remain sequestered in cytoplasmic compartments. Our data show that the MDCK in vitro model of cystogenesis and tubulogenesis adequately reflects several aspects of cystogenesis in vivo. We have used in vitro cystogenesis assay for a high throughput screen of small molecule drugs and identified drugs specifically inhibiting cystogenesis but not tubulogenesis in vitro.