Many in vivo processes, including morphogenesis or tumour maturation, involve small populations of cells within a spatially restricted region. However, the basic mechanisms underlying the dynamics of confined cell assemblies remain largely to be deciphered and would greatly benefit from well-controlled in vitro experiments. Here we show that confluent epithelial cells cultured on finite population-sized domains, exhibit collective low-frequency radial displacement modes as well as stochastic global rotation reversals. A simple mathematical model, in which cells are described as persistent random walkers that adapt their motion to that of their neighbours, captures the essential characteristics of these breathing oscillations. As these epithelia mature, a tri-dimensional peripheral cell cord develops at the domain edge by differential extrusion, as a result of the additional degrees of freedom of the border cells. These results demonstrate that epithelial confinement alone can induce morphogenesis-like processes including spontaneous collective pulsations and transition from 2D to 3D.