E‐cadherin is maternally expressed in most vertebrate species, but its function during early development of the vertebrate embryo proper is unknown. To directly examine E‐cadherin gene (cdh1) function in zebrafish, morpholino oligonucleotides (MOs) that inhibit E‐cadherin protein (Cdh1) expression were injected into embryos. Cdh1 knockdown reduced embryo survival. In early cdh1 MO‐injected embryos, the cleavage plane orientation between blastomeres was irregular and adhesion defects prevented normal compaction. Cdh1 knockdown inhibited epiboly cell movements. Epiboly delay caused yolk cell lysis and produced embryos with a bifurcated embryonic axis. Cdh1 knockdown inhibited gastrulation cell movements, causing defects in convergence and extension. Additionally, prechordal plate derivatives were absent in Cdh1 knockdown embryos even though presumptive prechordal plate markers were induced normally. E‐cadherin mRNA coinjection demonstrated the specificity of cdh1 MO‐induced defects. Our experiments illustrate the importance of cdh1 in regulating morphogenetic cell movements and tissue formation in the early embryo. Developmental Dynamics 230:263–277, 2004. © 2004 Wiley‐Liss, Inc.