Proper functioning of the vertebrate central nervous system requires the precise positioning of many neuronal cell types. This positioning is established during early embryogenesis when gene regulatory networks pattern the neural tube along its anteroposterior and dorsoventral axes. Dorsoventral patterning of the embryonic neural tube gives rise to multiple progenitor cell domains that go on to differentiate unique classes of neurons and glia. While the genetic program is reasonably well understood for some lineages, such as ventrally derived motor neurons and glia, other lineages are much less characterized. Here we show that prdm12b, a member of the PR domain containing-family of transcriptional regulators, is expressed in the p1 progenitor domain of the zebrafish neural tube in response to Sonic Hedgehog signaling. We find that disruption of prdm12b function leads to dorsal expansion of nkx6.1 expression and loss of p1-derived eng1b-expressing V1 interneurons, while the adjacent p0 and p2 domains are unaffected. We also demonstrate that prdm12b-deficient fish exhibit an abnormal touch-evoked escape response with excessive body contractions and a prolonged response time, as well as an inability to coordinate swimming movements, thereby revealing a functional role for V1 interneurons in locomotor circuits. We conclude that prdm12b is required for V1 interneuron specification and that these neurons control swimming movements in zebrafish.