Collective cell migration (CCM) is involved in multiple biological processes, including embryonic morphogenesis, angiogenesis, and cancer invasion. However, the molecular mechanisms underlying CCM, especially leader cell formation, are poorly understood. Here, we show that a signaling pathway regulating angiomotin (AMOT) cleavage plays a role in CCM, using mammalian epithelial cells and mouse models. In a confluent epithelial monolayer, full-length AMOT localizes at cell-cell junctions and limits cell motility. After cleavage, the C-terminal fragment of AMOT (AMOT-CT) translocates to the cell-matrix interface to promote the maturation of focal adhesions (FAs), generate traction force, and induce leader cell formation. Meanwhile, decreased full-length AMOT at cell-cell junctions leads to tissue fluidization and coherent migration of cell collectives. Hence, the cleavage of AMOT serves as a molecular switch to generate polarized contraction, promoting leader cell formation and CCM.