Development of cortical regions with precise, sharp, and regular boundaries is essential for physiological function. However, little is known of the mechanisms ensuring these features. Here, we show that determination of the boundary between neocortex and medial entorhinal cortex (MEC), two abutting cortical regions generated from the same progenitor lineage, relies on COUP-TFI (chicken ovalbumin upstream promoter-transcription factor I), a patterning transcription factor with graded expression in cortical progenitors. In contrast with the classical paradigm, we found that increased COUP-TFI expression expands MEC, creating protrusions and disconnected ectopic tissue. We further developed a mathematical model that predicts that neuronal specification and differential cell affinity contribute to the emergence of an instability region and boundary sharpness. Correspondingly, we demonstrated that high expression of COUP-TFI induces MEC cell fate and protocadherin 19 expression. Thus, we conclude that a sharp boundary requires a subtle interplay between patterning transcription factors and differential cell affinity.