Members of the Ikaros family of zinc-finger transcription factors have been shown to be critical for immune and blood cell development. However, the role of the most divergent family member, Pegasus, has remained elusive, although it shows conservation to invertebrate Hunchback proteins that influence embryonic patterning through regulation of homeodomain genes. Zebrafish was employed as a relevant model to investigate the function of Pegasus since it possesses a single pegasus orthologue with high homology to its mammalian counterparts. During zebrafish embryogenesis pegasus transcripts were initially maternally-derived and later replaced by zygotic expression in the diencephalon, tectum, hindbrain, thymus, eye, and ultimately the exocrine pancreas and intestine. Morpholino-mediated knockdown of the zebrafish pegasus gene resulted in disrupted left–right asymmetry of the gut and pancreas. Molecular analysis indicated that zebrafish Pegasus localised to the nucleus in discrete non-nucleolar structures and bound the ‘atypical’ DNA sequence GN3GN2G, confirming its presumed role as a transcriptional regulator. In vivo transcriptome analysis identified candidate target genes, several of which encoded homeodomain transcription factors. One of these, pitx2, implicated in left–right asymmetry, possessed appropriate ‘atypical’ Pegasus binding sites in its promoter. Knockdown of Pegasus affected both the level and asymmetry of pitx2 expression, as well as disrupting the asymmetry of the lefty2 and spaw genes, explaining the perturbed left–right patterning in pegasus morphants. Collectively these results provide the first definitive insights into the in vivo role of Pegasus, supporting the notion that it acts as a broader regulator of development, with potential parallels to the related invertebrate Hunchback proteins.