Organ formation is a complex, multi-scale event involving changes at the intracellular, cellular and tissue level. A key step in organogenesis is the formation of characteristically shaped organ precursors. However, the cellular mechanisms driving organ precursor formation are not well understood. Here, we investigate the epithelial rearrangements responsible for the development of the hemispherical retinal neuroepithelium (RNE), a part of the optic cup. We show that, surprisingly, active collective epithelial migration of cells at the rim of the cup is the most prominent player in RNE formation. This rim involution is driven by progressive cell-matrix contacts and actively translocates prospective RNE cells to their correct location before they adopt neuroepithelial fate. Failure of rim migration during neuroepithelium formation leads to ectopic determination of RNE cells and consequently impairs eye formation. Overall, this study illustrates how spatiotemporal coordination between morphogenic movements and fate determination critically influences organogenesis.