We describe a method for isolating RNA suitable for high-throughput RNA sequencing (RNA-seq) from small numbers of fluorescently labeled cells isolated from live zebrafish (Danio rerio) embryos without using costly, commercially available columns. This method ensures high cell viability after dissociation and suspension of cells and gives a very high yield of intact RNA. We demonstrate the utility of our new protocol by isolating RNA from fluorescence activated cell sorted (FAC sorted) pineal complex neurons in wild-type and tbx2b knockdown embryos at 24 hours post fertilization. Tbx2b is a transcription factor required for pineal complex formation. We describe a bioinformatics pipeline used to analyze differential expression following high-throughput sequencing and demonstrate the validity of our results using in situ hybridization of differentially expressed transcripts. This protocol brings modern transcriptome analysis to the study of small cell populations in zebrafish.