During puberty, hormonal signals initiate epithelial branching morphogenesis in mammary glands, and this study shows that the extracellular matrix has a role in patterning the epithelium. During branching morphogenesis, the epithelium progressed from a random orientation to being oriented along the long axis of the mammary gland, which indicates that a patterning cue for orientation might pre-exist in the stroma. Indeed, tracks of collagen I fibres in the stroma, which are oriented towards the long axis before branching morphogenesis begins, were co-oriented with the direction of epithelial outgrowth in early-stage mammary glands. The orientation of collagen I fibres was found to be sufficient to direct epithelial branch orientation, in a RAC1-dependent manner. RHOA–RHO kinase-mediated actomyosin contractions were not required to sense the orientation of collagen I fibres but they enhanced fibre orientation, which suggests that contractions generated by the branching epithelium could reinforce directional decisions.