The fusion of digits or toes, syndactyly, can be part of complex syndromes, including van der Woude syndrome. A subset of van der Woude cases is caused by dominant-negative mutations in the epithelial transcription factor Grainyhead like-3 (GRHL3), and Grhl3^−/−mice have soft-tissue syndactyly. Although impaired interdigital cell death of mesenchymal cells causes syndactyly in multiple genetic mutants, Grhl3^−/− embryos had normal interdigital cell death, suggesting alternative mechanisms for syndactyly. We found that in digit separation, the overlying epidermis forms a migrating interdigital epithelial tongue (IET) when the epithelium invaginates to separate the digits. Normally, the non-adhesive surface periderm allows the IET to bifurcate as the digits separate. In contrast, in Grhl3^−/− embryos, the IET moves normally between the digits but fails to bifurcate because of abnormal adhesion of the periderm. Our study identifies epidermal developmental processes required for digit separation.