PRDM genes are a family of transcriptional regulators that modulate cellular processes such as differentiation, cell growth and apoptosis. Some family members are involved in tissue or organ maturation, and are differentially expressed in specific phases of embryonic development. PRDM5 is a recently identified family member that functions as a transcriptional repressor and behaves as a putative tumor suppressor in different types of cancer. Using gene expression profiling, we found that transcriptional targets of PRDM5 in human U2OS cells include critical genes involved in developmental processes, and specifically in regulating wnt signaling. We therefore assessed PRDM5 function in vivo by performing loss-of-function and gain-of-function experiments in zebrafish embryos. Depletion of prdm5 resulted in impairment of morphogenetic movements during gastrulation and increased the occurrence of the masterblind phenotype in axin+/- embryos, characterized by the loss of eyes and telencephalon. Overexpression of PRDM5 mRNA had opposite effects on the development of anterior neural structures, and resulted in embryos with a shorter body axis due to posterior truncation, a bigger head and abnormal somites. In situ hybridization experiments aimed at analyzing the integrity of wnt pathways during gastrulation at the level of the prechordal plate revealed inhibition of non canonical PCP wnt signaling in embryos overexpressing PRDM5, and over-activation of wnt/beta-catenin signaling in embryos lacking Prdm5. Our data demonstrate that PRDM5 regulates the expression of components of both canonical and non canonical wnt pathways and negatively modulates wnt signaling in vivo.