During development, the epiblast is patterned by signalling pathways to form the germ layers. How these signalling pathways create and regulate patterning in human embryos, however, remains unclear. Now, Eric Siggia and colleagues employ a human embryonic stem cell (hESC)-based ‘gastruloid’ system to address the mechanisms underlying WNT-mediated patterning. In this system, micropatterned hESCs self-organise into a primitive streak (PS)-like structure, with mesoderm and endoderm on the colony periphery, and pluripotent cells located centrally. The authors show that, at high cell density, WNT activity is localised to the colony edge. Knockout of the gene encoding E-CAD (a cell-adhesion protein and WNT antagonist) abolishes this early pattern, suggesting a connection between mechanics and WNT signalling. Surprisingly, peripheral localisation of the PS is maintained in E-CAD−/− colonies, implying that other factors must control PS formation. Following this, the authors reveal that the secreted WNT inhibitor DKK1 regulates patterning; in its absence, a wave of epithelial-to-mesenchymal transition propagates from the colony boundary to the centre. Finally, the authors develop a quantitative model that explains the dynamics of this bistable system. Together, these data suggest that WNT activity is restricted, first by early local E-CAD inhibition and later by DKK1 inhibition that is highest in the colony centre and low at the boundary.