The notochord defines the axial structure of all vertebrates during development.Notogenesis is a result of major cell reorganization in the mesoderm, the convergence and the extension of the axial cells. However, it is currently not known how these processes act together in a coordinated way during notochord formation. Analysing the tissue flow, we determined the displacement of the axial mesoderm and identified, relative to the ectoderm, an actively-migrating notochord tip cell population and a group of trailing notochordal plate cells. Molecularly, these tip cells express Protocadherin18a, a member of the cadherin superfamily. We show that Pcdh18a-mediated recycling of E-cadherin adhesion complexes transforms these tip cells into a cohesive and fast migrating cell group. In turn, these tip cells subsequently instruct the trailing mesoderm. We simulated cell migration during early mesoderm formation using a lattice-based mathematical framework, and predicted that the requirement for an anterior, local motile cell cluster could guide the intercalation of the posterior, axial cells. Indeed, grafting experiments validated the predictions and induced ectopic notochord-like rods. Our findings indicate that the tip cells influence the trailing mesodermal cell sheet by inducing the formation of the notochord.