Despite acting as a barrier for the organs they encase, epithelial cells turn over at some of the fastest rates in the body. However, epithelial cell division must be tightly linked to cell death to preserve barrier function and prevent tumour formation. How does the number of dying cells match those dividing to maintain constant numbers? When epithelial cells become too crowded, they activate the stretch-activated channel Piezo1 to trigger extrusion of cells that later die. However, it is unclear how epithelial cell division is controlled to balance cell death at the steady state. Here we show that mammalian epithelial cell division occurs in regions of low cell density where cells are stretched. By experimentally stretching epithelia, we find that mechanical stretch itself rapidly stimulates cell division through activation of the Piezo1 channel. To stimulate cell division, stretch triggers cells that are paused in early G2 phase to activate calcium-dependent phosphorylation of ERK1/2, thereby activating the cyclin B transcription that is necessary to drive cells into mitosis. Although both epithelial cell division and cell extrusion require Piezo1 at the steady state, the type of mechanical force controls the outcome stretch induces cell division, whereas crowding induces extrusion. How Piezo1-dependent calcium transients activate two opposing processes may depend on where and how Piezo1 is activated, as it accumulates in different subcellular sites with increasing cell density. In sparse epithelial regions in which cells divide, Piezo1 localizes to the plasma membrane and cytoplasm, whereas in dense regions in which cells extrude, it forms large cytoplasmic aggregates. Because Piezo1 senses both mechanical crowding and stretch, it may act as a homeostatic sensor to control epithelial cell numbers, triggering extrusion and apoptosis in crowded regions and cell division in sparse regions.