During cellularization, the Drosophila embryo undergoes a large-scale cytokinetic event that packages thousands of syncytial nuclei into individual cells, resulting in the de novo formation of an epithelial monolayer in the cortex of the embryo. The formation of adherens junctions is one of the many aspects of epithelial polarity that is established during cellularization: at the onset of cellularization, the Drosophila beta-catenin homologue Armadillo (Arm) accumulates at the leading edge of the cleavage furrow, and later to the apicolateral region where the zonula adherens precursors are formed. In this paper, we show that the basal accumulation of Arm colocalizes with DE-cadherin and Dalpha-catenin, and corresponds to a region of tight membrane association, which we refer to as the basal junction. Although the two junctions are similar in components and function, they differ in their response to the novel cellularization protein Nullo. Nullo is present in the basal junction and is required for its formation at the onset of cellularization. In contrast, Nullo is degraded before apical junction formation, and prolonged expression of Nullo blocks the apical clustering of junctional components, leading to morphological defects in the developing embryo. These observations reveal differences in the formation of the apical and basal junctions, and offer insight into the role of Nullo in basal junction formation.