In multicellular organisms, epithelial cells form layers separating compartments responsible for different physiological functions. At the early stage of epithelial layer formation, each cell of an aggregate defines an inner and an outer side by breaking the symmetry of its initial state, in a process known as epithelial polarization. By integrating recent biochemical and biophysical data with stochastic simulations of the relevant reaction-diffusion system, we provide evidence that epithelial cell polarization is a chemical phase-separation process induced by a local bistability in the signaling network at the level of the cell membrane. The early symmetry breaking event triggering phase separation is induced by adhesion-dependent mechanical forces localized in the point of convergence of cell surfaces when a threshold number of confluent cells is reached. The generality of the emerging phase-separation scenario is likely common to many processes of cell polarity formation.