Apical-basal polarization is essential for epithelial tissue formation, segregating cortical domains to perform distinct physiological functions. Cortical lipid asymmetry has emerged as a determinant of cell polarization. We report a network of phosphatidylinositol phosphate (PIP)-modifying enzymes, some of which are transcriptionally induced upon embedding epithelial cells in extracellular matrix, and that are essential for apical-basal polarization. Unexpectedly, we find that PI(3,4)P₂ localization and function is distinct from the basolateral determinant PI(3,4,5)P₃. PI(3,4)P₂ localizes to the apical surface, and Rab11a-positive apical recycling endosomes. PI(3,4)P₂ is produced by the 5-phosphatase SHIP1 and Class-II PI3-Kinases to recruit the endocytic regulatory protein SNX9 to basolateral domains that are being remodeled into apical surfaces. Perturbing PI(3,4)P₂ levels results in defective polarization through subcortical retention of apically destined vesicles at apical membrane initiation sites. We conclude that PI(3,4)P₂ is a determinant of apical membrane identity.