Tissue morphogenesis entails the processes that generate tissues and organs. These processes are guided by biochemical and mechanical signals that orchestrate cell-scale events to drive tissue-scale changes. While signalling pathways driving morphogenesis are well described, the role/contribution of mechanical forces is less understood. In this work, we use a microfluidic device to encapsulate model epithelial tissues inside hollow hydrogel microcapsules. We show that forces arising from epithelial growth under confinement are sufficient to drive folding. After folding, the tissue continues to grow within capsules until pressure reaches a threshold value that halts cell cycle progression. Interestingly, monolayers confined in softer capsules do not reach this range of pressure and continue to undergo cell cycle progression, indicating that this regulation is substrate-independent. Altogether, these findings underlie the importance of mechanical forces/stresses during shape generation and maintenance in epithelia, and also uncover many further questions regarding tissue shape/size regulation by mechanical feedback.