In this study, we examined the role of the L27 [(LIN2-LIN7) domain] and PDZ domain (domain previously found in PSD95-DlgA-ZO-1) for protein-protein interaction of the scaffold protein LIN7 in tight junction (TJ) assembly in Madin-Darby canine kidney (MDCK) cells and found that the stable expression of a LIN7 mutant lacking the L27 domain (DeltaL27 mutant) acts as a dominant interfering protein by inhibiting TJ localization of endogenous LIN7. The loss of LIN7 did not alter the localization of the PALS1 (protein associated with LIN7) partner of the L27 domain but prevented TJ localization of the insulin receptor substrate p53 (IRSp53), a partner of the PDZ domain of LIN7. The function of both L27 and PDZ domains of LIN7 in IRSp53 localization to TJs has been further demonstrated by reducing the expression of LIN7 (LIN7 small hairpin RNA experiments) and by expression of IRSp53 deleted of its motif for PDZ interaction (IRSp53Delta5) or fused to the L27 domain of LIN7 (L27-IRSp53Delta5). Cell lines with decreased localization of LIN7 and IRSp53 to TJs showed defects during assembly of TJs and cyst polarization and failed to activate Rac1, a member of the Rho guanosine triphosphatases family crucially involved in actin organization and orientation of apicobasal polarity. These data therefore indicate that LIN7-IRSp53 association plays a role during assembly of functional TJs and surface polarization in epithelial cells.