The brain, heart and gastro-intestinal tract develop distinct left-right (LR) asymmetries. Asymmetric cilia-dependent fluid flow in the embryonic node in mouse, Kupffer's vesicle in zebrafish, notochordal plate in rabbit and gastrocoel roof plate in frog appears to be a conserved mechanism that directs LR asymmetric gene expression and establishes the orientation of organ asymmetry. However, the cellular processes and genetic pathways that control the formation of these essential ciliated structures are unknown. In zebrafish, migratory dorsal forerunner cells (DFCs) give rise to Kupffer's vesicle (KV), a ciliated epithelial sheet that forms a lumen and generates fluid flow. Using the epithelial marker atypical Protein Kinase C (aPKC) and other markers to analyze DFCs and KV cells, we describe a multi-step process by which DFCs form a functional KV. Using mutants and morpholinos, we show that two T-box transcription factors-No tail (Ntl)/Brachyury and Tbx16/Spadetail-cooperatively regulate an early step of DFC mesenchyme to epithelial transition (MET) and KV cell specification. Subsequently, each transcription factor independently controls a distinct step in KV formation: Tbx16 regulates apical clustering of KV cells and Ntl is necessary for KV lumen formation. By targeting morpholinos to DFCs, we show that these cell autonomous functions in KV morphogenesis are necessary for LR patterning throughout the embryo.