A three-dimensional memory device includes an alternating stack of insulating layers and electrically conductive layers located over a substrate, memory openings vertically extending through the alternating stack, and memory stack structures located within a respective one of the memory openings. A multi-pillared dielectric isolation structure extends through upper sections of a neighboring pair of memory openings. The multi-pillared dielectric isolation structure includes a plurality of dielectric pillar portions located within a respective one of the memory openings, and at least one horizontally-extending portion adjoining each of the plurality of dielectric pillar portions and located between a vertically neighboring pair of insulating layers within the alternating stack. The at least one horizontally-extending portion laterally separates laterally neighboring strips of at least one electrically conductive layer within the alternating stack.