Mesenchymal condensation is critical for organogenesis, yet little is known about how this process is controlled. Here we show that Fgf8 and Sema3f, produced by early dental epithelium, respectively, attract and repulse mesenchymal cells, which cause them to pack tightly together during mouse tooth development. Resulting mechanical compaction-induced changes in cell shape induce odontogenic transcription factors (Pax9, Msx1) and a chemical cue (BMP4), and mechanical compression of mesenchyme is sufficient to induce tooth-specific cell fate switching. The inductive effects of cell compaction are mediated by suppression of the mechanical signaling molecule RhoA, and its overexpression prevents odontogenic induction. Thus, the mesenchymal condensation that drives tooth formation is induced by antagonistic epithelial morphogens that manifest their pattern-generating actions mechanically via changes in mesenchymal cell shape and altered mechanotransduction.