Rab11 GTPase proteins are required for cytokinesis, ciliogenesis, and lumenogenesis. Rab11a is critical for apical delivery of podocalyxin (PODXL) during lumen formation in epithelial cells. SH3BP5 and SH3BP5L are guanine nucleotide exchange factors (GEFs) for Rab11. We show that SH3BP5 and SH3BP5L are required for activation of Rab11a and cyst lumen formation. Using proximity-dependent biotin identification (BioID) interaction proteomics, we have identified SH3BP5 and its paralogue SH3BP5L as new substrates of the poly-ADP-ribose polymerase Tankyrase and the E3 ligase RNF146. We provide data demonstrating that epithelial polarity via cyst lumen formation is governed by Tankyrase, which inhibits Rab11a activation through the suppression of SH3BP5 and SH3BP5L. RNF146 reduces Tankyrase protein abundance and restores Rab11a activation and lumen formation. Thus, Rab11a activation is controlled by a signaling pathway composed of the sequential inhibition of SH3BP5 paralogues by Tankyrase, which is itself suppressed by RNF146.