Generation of a barrier in multi-layered epithelia like the epidermis requires restricted positioning of functional tight junctions (TJ) to the most suprabasal viable layer. This positioning necessitates tissue-level polarization of junctions and the cytoskeleton through unknown mechanisms. Using quantitative whole-mount imaging, genetic ablation, and traction force microscopy and atomic force microscopy, we find that ubiquitously localized E-cadherin coordinates tissue polarization of tension-bearing adherens junction (AJ) and F-actin organization to allow formation of an apical TJ network only in the uppermost viable layer. Molecularly, E-cadherin localizes and tunes EGFR activity and junctional tension to inhibit premature TJ complex formation in lower layers while promoting increased tension and TJ stability in the granular layer 2. In conclusion, our data identify an E-cadherin-dependent mechanical circuit that integrates adhesion, contractile forces and biochemical signaling to drive the polarized organization of junctional tension necessary to build an in vivo epithelial barrier.