Epithelial cell adhesion molecule (EpCAM) is best known as a tumor-associated protein highly expressed in carcinomas. The function of this cell surface protein during embryonic development and its potential role in cancer are still poorly understood. We identified EpCAM in a gain-of-function screen for inducers of abnormal tissue mixing during gastrulation. Elevated EpCAM levels in either the ectoderm or the mesoderm confer "invasive" properties to cells in both populations. We found that this phenotype represents an "overstimulation" of an essential activity of EpCAM in controlling cell movements during embryonic development. Surprisingly, this property is independent of the putative adhesive function of EpCAM, and rather relies on a novel signaling function that operates through down-regulation of PKC activity. We show that inhibition of novel PKCs accounts entirely for the invasive phenotype induced by abnormally high levels of EpCAM as well as for its normal function in regulating cell rearrangement during early development.