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Early embryos of some metazoans polarize radially to facilitate critical patterning events such as gastrulation and asymmetric cell division; however, little is known about how radial polarity is established. Early embryos of Caenorhabditis elegans polarize radially when cell contacts restrict the polarity protein PAR-6 to contact-free cell surfaces, where PAR-6 regulates gastrulation movements. We have identified a Rho guanosine triphosphatase activating protein (RhoGAP), PAC-1, which mediates C. elegans radial polarity and gastrulation by excluding PAR-6 from contacted cell surfaces. We show that PAC-1 is recruited to cell contacts, and we suggest that PAC-1 controls radial polarity by restricting active CDC-42 to contact-free surfaces, where CDC-42 binds and recruits PAR-6. Thus, PAC-1 provides a dynamic molecular link between cell contacts and PAR proteins that polarizes embryos radially.