Volvox is one of the simplest multicellular organisms with only two cell types, yet it has a surprisingly complex extracellular matrix (ECM) containing many region-specific morphological components, making Volvox suitable as a model system for ECM investigations. ECM deposition begins shortly after inversion, which is the process by which the embryo turns itself right-side-out at the end of embryogenesis. It was previously shown that the gene encoding an ECM glycoprotein called ISG is transcribed very transiently during inversion. Here we show that the developmentally controlled ISG accumulates at the bases of the flagella right after inversion, before any morphologically recognizable ECM structures have yet developed. Later, ISG is abundant in the 'flagellar hillocks' that encircle the basal ends of all flagella, and in the adjacent 'boundary zone' that delimits the spheroid. Transgenic Volvox were generated which express a truncated form of ISG. These transgenics exhibit a severely disorganized ECM within which the cells are embedded in a highly chaotic manner that precludes motility. A synthetic version of the C-terminal decapeptide of ISG has a similar disorganizing effect, but only when it is applied during or shortly after inversion. We postulate that ISG plays a critical role in morphogenesis and acts as a key organizer of ECM architecture; at the very beginning of ECM formation ISG establishes an essential initial framework that both holds the somatic cells in an adaptive orientation and acts as the scaffold upon which the rest of the ECM can be properly assembled, assuring that somatic cells of post-inversion spheroids are held in orientations and locations that makes adaptive swimming behavior possible.