Although implicated in adhesion, only a few studies address how the actin assembly factors guide cell positioning in multicellular tissues. The formin, Dia1, localizes to the proliferative basal layer of the epidermis. In organotypic cultures, Dia1 depletion reduced basal cell density and resulted in stratified tissues with disorganized differentiation and proliferative markers. Since crowding induces differentiation in epidermal tissues, we hypothesized that Dia1 is essential to reach densities amenable to differentiation before or during stratification. Consistent with this, forced crowding of Dia1-deficient cells rescued transcriptional abnormalities. We find Dia1 promotes rapid growth of lateral cell-cell adhesions, necessary for the construction of a highly crowded monolayer. In aggregation assays, cells sorted into distinct layers based on Dia1 expression status. These results suggest that as basal cells proliferate, reintegration and packing of Dia1-positive daughter cells is favored, whereas Dia1-negative cells tend to delaminate to a suprabasal compartment. This work elucidates the role of formin expression patterns in constructing distinct cellular domains within stratified epithelia.