Initiation of motile cell behavior in embryonic development occurs during late blastula stages when gastrulation begins. At this stage, the strong adhesion of blastomeres has to be modulated to enable dynamic behavior, similar to epithelial-to-mesenchymal transitions. We show that, in zebrafish maternal and zygotic (MZ)spg embryos mutant for the stem cell transcription factor Pou5f1/Oct4, which are severely delayed in the epiboly gastrulation movement, all blastomeres are defective in E-cadherin (E-cad) endosomal trafficking, and E-cad accumulates at the plasma membrane. We find that Pou5f1-dependent control of EGF expression regulates endosomal E-cad trafficking. EGF receptor may act via modulation of p120 activity. Loss of E-cad dynamics reduces cohesion of cells in reaggregation assays. Quantitative analysis of cell behavior indicates that dynamic E-cad endosomal trafficking is required for epiboly cell movements. We hypothesize that dynamic control of E-cad trafficking is essential to effectively generate new adhesion sites when cells move relative to each other.