Germ-layer formation during gastrulation is both a fundamental step of development and a paradigm for tissue formation and remodeling. However, the cellular and molecular basis of germ-layer segregation is poorly understood, mostly because of the lack of direct in vivo observations. We used mosaic zebrafish embryos to investigate the formation of the endoderm. High-resolution live imaging and functional analyses revealed that endodermal cells reach their characteristic innermost position through an active, oriented, and actin-based migration dependent on Rac1, which contrasts with the previously proposed differential adhesion cell sorting. Rather than being attracted to their destination, the yolk syncytial layer, cells appear to migrate away from their neighbors. This migration depends on N-cadherin that, when imposed in ectodermal cells, is sufficient to trigger their internalization without affecting their fate. Overall, these results lead to a model of germ-layer formation in which, upon N-cadherin expression, endodermal cells actively migrate away from their epiblastic neighbors to reach their internal position, revealing cell-contact avoidance as an unexplored mechanism driving germ-layer formation.