Collective cell migration (CCM), in which cell–cell integrity remains preserved during movement, plays an important role in the progression of cancer. However, studies describing CCM in cancer progression are majorly focused on the effects of extracellular tissue components on moving cell plasticity. The molecular and cellular mechanisms of CCM during cancer progression remain poorly explored. Here, we report that proteolipid protein 2 (PLP2), a colonic epithelium-enriched transmembrane protein, plays a vital role in the CCM of invasive human colorectal cancer (CRC) epithelium by modulating leading-edge cell dynamics in 2D. The extracellular pool of PLP2, secreted via exosomes, was also found to contribute to the event. During CCM, the protein was found to exist in association with ZO-1 (also known as TJP1) and to be involved in the positioning of the latter at the migrating edge. PLP2-mediated positioning of ZO-1 at the leading edge further alters actin cytoskeletal organization that involves Rac1 activation. Taken together, our findings demonstrate that PLP2, via its association with ZO-1, drives CCM in CRC epithelium by modulating the leading-edge actin cytoskeleton, thereby opening up new avenues of cancer research.