How adhesive contacts with neighbors may affect epithelial cell cytokinesis is unknown. We report that in Drosophila, septins are specifically required for planar (but not orthogonal) cytokinesis. During planar division, cytokinetic furrowing initiates basally, resulting in a contractile ring displaced toward the adherens junction (AJ). The formation of new AJ between daughter cells requires the disengagement of E-Cadherin complexes between mitotic and neighboring cells at the cleavage furrow, followed by the assembly of E-Cadherin complexes on the daughter-daughter interface. The strength of adhesion with neighbors directly impacts both the kinetics of AJ disengagement and the length of the new AJ. Loss of septins causes a reduction in the contractility of the actomyosin ring and prevents local disengagement of AJ in the cleavage furrow. By modulating the strength of tension induced by neighbors, we uncover a mechanical function for septins to overcome the extrinsic tension induced by neighboring interphasic cells.