First experimental evidence showing the connection between blob/hole formation and zonal flow generation was obtained in the edge plasma of the JET tokamak. Holes as well as blobs are observed to be born in the edge shear layer, where zonal flows shear off meso-scale coherent structures, leading to disconnection of positive and negative wave crests. The newly-formed blobs transport azimuthal momentum up the gradient of the azimuthal flow and drive the zonal-flow shear while moving outwards. During this process energy is transferred from the meso-scale coherent structures to the zonal flows via the turbulent Reynolds stress, resulting in nonlinear saturation of edge turbulence and suppression of meso-scale fluctuations. These findings carry significant implications on the mechanism of structure formation in magnetically confined plasma turbulence.