Branching morphogenesis of developing organs requires coordinated but poorly understood changes in epithelial cell-cell adhesion and cell motility. We report that Btbd7 is a crucial regulator of branching morphogenesis in vivo. Btbd7 levels are elevated in peripheral cells of branching epithelial end buds, where it enhances cell motility and cellcell adhesion dynamics. Genetic ablation of Btbd7 in mice disrupts branching morphogenesis of salivary gland, lung and kidney. Btbd7 knockout results in more tightly packed outer bud cells, which display stronger E-cadherin localization, reduced cell motility and decreased dynamics of transient cell separations associated with cleft formation; inner bud cells remain unaffected. Mechanistic analyses using in vitro MDCK cells to mimic outer bud cell behavior establish that Btbd7 promotes loss of E-cadherin from cell-cell adhesions with enhanced migration and transient cell separation. Btbd7 can enhance E-cadherin ubiquitination, internalization, and degradation in MDCK and peripheral bud cells for regulating cell dynamics. These studies show how a specific regulatory molecule, Btbd7, can function at a local region of developing organs to regulate dynamics of cell adhesion and motility during epithelial branching morphogenesis.