Despite being implicated as a mechanism driving gastrulation and body axis elongation in mouse embryos, the cellular mechanisms underlying mammalian convergent extension (CE) are unknown. Here we show, with high-resolution time-lapse imaging of living mouse embryos, that mesodermal CE occurs by mediolateral cell intercalation, driven by mediolaterally polarized cell behavior. The initial events in the onset of CE are mediolateral elongation, alignment and orientation of mesoderm cells as they exit the primitive streak. This cell shape change occurs prior to, and is required for, the subsequent onset of mediolaterally polarized protrusive activity. In embryos mutant for PTK7, a novel cell polarity protein, the normal cell elongation and alignment upon leaving the primitive streak, the subsequent polarized protrusive activity, and CE and axial elongation all failed. The mesoderm normally thickens and extends, but on failure of convergence movements in Ptk7 mutants, the mesoderm underwent radial intercalation and excessive thinning, which suggests that a cryptic radial cell intercalation behavior resists excessive convergence-driven mesodermal thickening in normal embryos. When unimpeded by convergence forces in Ptk7 mutants, this unopposed radial intercalation resulted in excessive thinning of the mesoderm. These results show for the first time the polarized cell behaviors underlying CE in the mouse, demonstrate unique aspects of these behaviors compared with those of other vertebrates, and clearly define specific roles for planar polarity and for the novel planar cell polarity gene, Ptk7, as essential regulators of mediolateral cell intercalation during mammalian CE.