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Shaping the animal body plan is a complex process that involves the spatial organization and patterning of the different germ layers. Recent advances in live imaging have started to unravel the cellular choreography underlying this process in mammals, however, the sequence of events transforming an unpatterned cell ensemble into structured territories is largely unknown. Here, using gastruloids -3D aggregates of mouse embryonic stem cells- we study the formation of one of the three germ layers, the endoderm. We show that the endoderm is generated from an epiblast-like homogeneous state by a three-step mechanism: (i) a loss of E-cadherin mediated contacts in parts of the aggregate leading to the appearance of islands of E-cadherin expressing cells surrounded by cells devoid of E-cadherin, (ii) a separation of these two populations with islands of E-cadherin expressing cells flowing toward the aggregate tip, and (iii) their differentiation into an endoderm population. During the flow, the islands of E-cadherin expressing cells are surrounded by cells expressing T-Brachyury, reminiscent of the process occurring at the primitive streak. Consistent with recent in vivo observations, the endoderm formation in the gastruloids does not require an epithelial-to-mesenchymal transition, but rather a maintenance of an epithelial state for a subset of cells coupled with fragmentation of E-cadherin contacts in the vicinity, and a sorting process. Our data emphasize the role of signaling and tissue flows in the establishment of the body plan. European Research Council (AdG MiniEmbryoBlueprint 834580)