Directional Collective cell migration (DCCM) is crucial for morphogenesis and cancer metastasis formation. P-cadherin, which is a cell-cell adhesion protein expressed in carcinoma and aggressive sarcoma and associated with poor prognosis, is a major DCCM regulator. However, it is unclear how P-cadherin-mediated mechanical coupling between migrating cells influences force transmission to the extracellular matrix (ECM). Here, we found that decorin, a small proteoglycan that binds to and organizes collagen fibers, is specifically expressed and secreted upon P-cadherin, but not E- and R-cadherin expression. Using cell biological and biophysical approaches, we demonstrated that decorin is required for P-cadherin-mediated DCCM and collagen fiber orientation in the migration direction in 2D and 3D matrices. Moreover, P-cadherin, through decorin-mediated collagen fiber reorientation, promotes the activation of β1-integrin and of the β-Pix/CDC42 axis that increases traction forces allowing DCCM. Our results identify a novel P-cadherin-mediated mechanism to promote DCCM through ECM remodeling and ECM-guided cell migration.