Desmosomes are intercellular junctions of epithelia and are of widespread importance in the maintenance of tissue architecture. We provide evidence that desmosomal adhesion has a function in epithelial morphogenesis and cell-type-specific positioning. Blocking peptides corresponding to the cell adhesion recognition (CAR) sites of desmosomal cadherins block alveolar morphogenesis by epithelial cells from mammary lumen. Desmosomal CAR-site peptides also disrupt positional sorting of luminal and myoepithelial cells in aggregates formed by the reassociation of isolated cells. We demonstrate that desmosomal cadherins and E-cadherin are comparably involved in epithelial morphoregulation. The results indicate a wider role for desmosomal adhesion in morphogenesis than has previously been considered.