Migration of cells within epithelial sheets is an important feature of embryogenesis and other biological processes. Previous work has demonstrated a role for inositol 1,4,5-trisphosphate (IP(3))-mediated calcium signalling in the rearrangement of epidermal cells (also known as hypodermal cells) during embryonic morphogenesis in Caenorhabditis elegans. However the mechanism by which IP(3) production is stimulated is unknown. IP(3) is produced by the action of phospholipase C (PLC). We therefore surveyed the PLC family of C. elegans using RNAi and mutant strains, and found that depletion of PLC-1/PLC-epsilon produced substantial embryonic lethality. We used the epithelial cell marker ajm-1::gfp to follow the behaviour of epidermal cells and found that 96% of the arrested embryos have morphogenetic defects. These defects include defective ventral enclosure and aberrant dorsal intercalation. Using time-lapse confocal microscopy we show that the migration of the ventral epidermal cells, especially of the leading cells, is slower and often fails in plc-1(tm753) embryos. As a consequence plc-1 loss of function results in ruptured embryos with a Gex phenotype (gut on exterior) and lumpy larvae. Thus PLC-1 is involved in the regulation of morphogenesis. Genetic studies using gain- and loss-of-function alleles of itr-1, the gene encoding the IP(3) receptor in C. elegans, demonstrate that PLC-1 acts through ITR-1. Using RNAi and double mutants to deplete the other PLCs in a plc-1 background, we show that PLC-3/PLC-gamma and EGL-8/PLC-beta can compensate for reduced PLC-1 activity. Our work places PLC-epsilon into a pathway controlling epidermal cell migration, thus establishing a novel role for PLC-epsilon.