Withdrawal of differentiating cells from proliferative tissue is critical for embryonic development and adult tissue homeostasis; however, the mechanisms that control this cell behavior are poorly understood. Using high-resolution live-cell imaging in chick neural tube, we uncover a form of cell subdivision that abscises apical cell membrane and mediates neuron detachment from the ventricle. This mechanism operates in chick and mouse, is dependent on actin-myosin contraction, and results in loss of apical cell polarity. Apical abscission also dismantles the primary cilium, known to transduce sonic-hedgehog signals, and is required for expression of cell-cycle-exit gene p27/Kip1. We further show that N-cadherin levels, regulated by neuronal-differentiation factor Neurog2, determine cilium disassembly and final abscission. This cell-biological mechanism may mediate such cell transitions in other epithelia in normal and cancerous conditions.