During vertebrate development, trunk neural crest cells delaminate along the entire length of the dorsal neural tube and initially migrate as a non-segmented sheet. As they enter the somites, neural crest cells rearrange into spatially restricted segmental streams. Extracellular matrix components are likely to play critical roles in this transition from a sheet-like to a stream-like mode of migration, yet the extracellular matrix components and their modifying enzymes critical for this transition are largely unknown. Here, we identified the glycosyltransferase Lh3, known to modify extracellular matrix components, and its presumptive substrate Collagen18A1, to provide extrinsic signals critical for neural crest cells to transition from a sheet-like migration behavior to migrating as a segmental stream. Using live cell imaging we show that in lh3 null mutants, neural crest cells fail to transition from a sheet to a stream, and that they consequently enter the somites as multiple streams, or stall shortly after entering the somites. Moreover, we demonstrate that transgenic expression of lh3 in a small subset of somitic cells adjacent to where neural crest cells switch from sheet to stream migration restores segmental neural crest cell migration. Finally, we show that knockdown of the presumptive Lh3 substrate Collagen18A1 recapitulates the neural crest cell migration defects observed in lh3 mutants, consistent with the notion that Lh3 exerts its effect on neural crest cell migration by regulating post-translational modifications of Collagen18A1. Together these data suggest that Lh3–Collagen18A1 dependent ECM modifications regulate the transition of trunk neural crest cells from a non-segmental sheet like migration mode to a segmental stream migration mode.