PAR-1 kinases are required for polarity in diverse cell types, such as epithelial cells, where they localize laterally. PAR-1 activity is believed to be transduced by binding of 14-3-3 proteins to its phosphorylated substrates, but the relevant targets are unknown. We show that PAR-1 phosphorylates Bazooka/PAR-3 on two conserved serines to generate 14-3-3 binding sites. This inhibits formation of the Bazooka/PAR-6/aPKC complex by blocking Bazooka oligomerization and binding to aPKC. In epithelia, this complex localizes apically and defines the apical membrane, whereas Bazooka lacking PAR-1 phosphorylation/14-3-3 binding sites forms ectopic lateral complexes. Lateral exclusion by PAR-1/14-3-3 cooperates with apical anchoring by Crumbs/Stardust to restrict Bazooka localization, and loss of both pathways disrupts epithelial polarity. PAR-1 also excludes Bazooka from the posterior of the oocyte, and disruption of this regulation causes anterior-posterior polarity defects. Thus, antagonism of Bazooka by PAR-1/14-3-3 may represent a general mechanism for establishing complementary cortical domains in polarized cells.