Cell identity within the human urogenital tract is strongly influenced by hormonal signaling, yet increasing evidence suggests that epithelial differentiation may also be shaped by microenvironmental cues. In this study, we investigated how hormonal and physical environments modulate epithelial identity and plasticity using a human tissue-engineered urethral model. Primary epithelial and stromal cells derived from vaginal and trans-women’s urethral tissues were combined in homologous and heterologous configurations and cultured under controlled conditions. Constructs were exposed to estradiol or dihydrotestosterone, and epithelial differentiation was assessed using histological staining and immunofluorescence targeting lineage-specific markers. Our results show that vaginal epithelial cells cultured on vaginal stroma maintain a stable vaginal phenotype characterized by epithelial stratification and glycogen accumulation, although the magnitude of these features was modulated by hormonal stimulation. In contrast, urethral epithelial cells displayed a high degree of plasticity, adopting distinct phenotypes depending on the physical-culture environment. Notably, constructs containing urethral epithelium developed a dual phenotype, with vaginal-like differentiation at the air–liquid interface and a more urethral-like organization in immersed conditions. Furthermore, urethral cells derived from long-term estrogen-exposed tissues exhibited persistent expression of both urethral and vaginal markers, suggesting incomplete or hybrid differentiation states. Overall, these findings demonstrate that epithelial identity in the human urethra is not fixed but dynamically regulated by an interplay between intrinsic cellular properties, stromal interactions, and physical microenvironmental cues, while hormonal signaling alone appears insufficient to dictate cell fate. This study provides new insights into epithelial plasticity and has important implications for both developmental biology and tissue-engineering approaches to urogenital reconstruction.