The homeobox transcription factor Mtx2 is essential for epiboly, the first morphogenetic movement of gastrulation in zebrafish. Morpholino knockdown of Mtx2 results in stalling of epiboly and lysis due to yolk rupture. However, the mechanism of Mtx2 action is unknown. The role of mtx2 is surprising as most mix/bix family genes are thought to have roles in mesendoderm specification. Using a transgenic sox17-promoter driven EGFP line, we show that Mtx2 is not required for endoderm specification but is required for correct morphogenetic movements of endoderm and axial mesoderm. During normal zebrafish development, mtx2 is expressed at both the blastoderm margin and in the zebrafish equivalent of visceral endoderm, the extra-embryonic yolk syncytial layer (YSL). We show that formation of the YSL is not Mtx2 dependent, but that Mtx2 directs spatial arrangement of YSL nuclei. Furthermore, we demonstrate that Mtx2 knockdown results in loss of the YSL F-actin ring, a microfilament structure previously shown to be necessary for epiboly progression. In summary, we propose that Mtx2 acts within the YSL to regulate morphogenetic movements of both embryonic and extra-embryonic tissues, independently of cell fate specification.