Prion proteins (PrPs) are key players in fatal neurodegenerative disorders, yet their physiological functions remain unclear, as PrP knockout mice develop rather normally. We report a strong PrP loss-of-function phenotype in zebrafish embryos, characterized by the loss of embryonic cell adhesion and arrested gastrulation. Zebrafish and mouse PrP mRNAs can partially rescue this knockdown phenotype, indicating conserved PrP functions. Using zebrafish, mouse, and Drosophila cells, we show that PrP: (1) mediates Ca+2-independent homophilic cell adhesion and signaling; and (2) modulates Ca+2-dependent cell adhesion by regulating the delivery of E-cadherin to the plasma membrane. In vivo time-lapse analyses reveal that the arrested gastrulation in PrP knockdown embryos is due to deficient morphogenetic cell movements, which rely on E-cadherin–based adhesion. Cell-transplantation experiments indicate that the regulation of embryonic cell adhesion by PrP is cell-autonomous. Moreover, we find that the local accumulation of PrP at cell contact sites is concomitant with the activation of Src-related kinases, the recruitment of reggie/flotillin microdomains, and the reorganization of the actin cytoskeleton, consistent with a role of PrP in the modulation of cell adhesion via signaling. Altogether, our data uncover evolutionarily conserved roles of PrP in cell communication, which ultimately impinge on the stability of adherens cell junctions during embryonic development.