Delamination plays a pivotal role during normal development and cancer. Previous work has demonstrated that delamination and epithelial cell movement within the plane of an epithelium are associated with a change in cellular phenotype. However, how this positional change is linked to differentiation remains unknown. Using the developing mouse pancreas as a model system, we show that β cell delamination and differentiation are two independent events, which are controlled by Cdc42/N-WASP signaling. Specifically, we show that expression of constitutively active Cdc42 in β cells inhibits β cell delamination and differentiation. These processes are normally associated with junctional actin and cell-cell junction disassembly and the expression of fate-determining transcription factors, such as Isl1 and MafA. Mechanistically, we demonstrate that genetic ablation of N-WASP in β cells expressing constitutively active Cdc42 partially restores both delamination and β cell differentiation. These findings elucidate how junctional actin dynamics via Cdc42/N-WASP signaling cell-autonomously control not only epithelial delamination but also cell differentiation during mammalian organogenesis.