Tissue remodeling involves collective cell movement, and cell proliferation and apoptosis are observed in both development and disease. Apoptosis and proliferation are considered to be closely correlated, but little is known about their coordinated regulation in physiological tissue remodeling in vivo. The replacement of larval abdominal epidermis with adult epithelium in Drosophila pupae is a simple model of tissue remodeling. During this process, larval epidermal cells (LECs) undergo apoptosis and are replaced by histoblasts, which are adult precursor cells. By analyzing caspase activation at the single-cell level in living pupae, we found that caspase activation in LECs is induced at the LEC/histoblast boundary, which expands as the LECs die. Manipulating histoblast proliferation at the LEC/histoblast boundary, either genetically or by UV illumination, indicated that local interactions with proliferating histoblasts triggered caspase activation in the boundary LECs. Finally, by monitoring the spatiotemporal dynamics of the S/G₂/M phase in histoblasts in vivo, we found that the transition from S/G₂ phases is necessary to induce nonautonomous LEC apoptosis at the LEC/histoblast boundary. The replacement boundary, formed as caspase activation is regulated locally by cell-cell communication, may drive the dynamic orchestration of cell replacement during tissue remodeling.