Dynamic changes in three-dimensional cell shape are important for tissue form and function. In the developing Drosophila eye, photoreceptor differentiation requires the progression across the tissue of an epithelial fold known as the morphogenetic furrow. Morphogenetic furrow progression involves apical cell constriction and movement of apical cell edges. Here, we show that cells progressing through the morphogenetic furrow move their basal edges in opposite direction to their apical edges, resulting in a cellular tilting movement. We further demonstrate that cells generate, at their basal side, oriented, force-generating protrusions. Knockdown of the protein kinase Src42A or photoactivation of a dominant-negative form of the small GTPase Rac1 reduces protrusion formation. Impaired protrusion formation stalls basal cell movement and slows down morphogenetic furrow progression and photoreceptor differentiation. This work identifies a cellular tilting mechanism important for the generation of dynamic tissue shape changes and cell differentiation.