The hedgehog (hh) genes encode secreted signaling proteins that have important developmental functions in vertebrates and invertebrates. In Drosophila, expression of hh coordinates retinal development by propagating a wave of photoreceptor differentiation across the eye primordium. Here we report that two vertebrate hh genes, sonic hedgehog (shh) and tiggy-winkle hedgehog (twhh), may perform similar functions in the developing zebrafish. Both shh and twhh are expressed in the embryonic zebrafish retinal pigmented epithelium (RPE), initially in a discrete ventral patch which then expands outward in advance of an expanding wave of photoreceptor recruitment in the subjacent neural retina. A gene encoding a receptor for the hedgehog protein, ptc-2, is expressed by retinal neuroepithelial cells. Injection of a cocktail of antisense (alphashh/alphatwhh) oligonucleotides reduces expression of both hh genes in the RPE and slows or arrests the progression of rod and cone photoreceptor differentiation. Zebrafish strains known to have mutations in Hh signaling pathway genes similarly exhibit retardation of photoreceptor differentiation. We propose that hedgehog genes may play a role in propagating photoreceptor differentiation across the developing eye of the zebrafish.