The Musashi (Msi) family of RNA-binding proteins is important in stem and differentiating cells in many species. Here, we present a zebrafish gene/protein trap line gt(msi2b-citrine)ct57a that expresses a Citrine fusion protein with endogenous Msi2b. Our results reveal two phases of Msi2b expression: ubiquitous expression in progenitor cells in the early embryo and later, tissue-specific expression in differentiating cells in the olfactory organ, pineal gland, and subpopulations of neurons in the central nervous system (CNS). Interestingly, this division between early and late phases is paralleled by differential expression of msi2b alternative splicing products. Whereas the full-length and long variant v3 Msi2b predominate at early stages, the later expression of variants in differentiating tissues appears to be tissue specific. Using the gt(msi2b-citrine)ct57a, we characterized tissue-specific expression of Msi2b with cellular resolution in subsets of differentiating cells in the olfactory organ, pineal gland, CNS, and ventral neural tube. By performing transcription activator-like effectors nuclease-mediated biallelic genome editing or morpholino knockdown of Msi2b in zebrafish, our results show that early inactivation of Msi2b results in severe embryonic defects including hypertrophy of the ventricles and shortening of the body, consistent with an important role in cell proliferation and survival. Moreover, specific inactivation of Msi2b full-length indicates that this species is essential for the early role of Msi2b. This line provides a valuable tool both for live imaging of the endogenous Msi2b at subcellular resolution and manipulation of Msi2b-expressing cells.