Histone deacetylases (HDACs) are involved in multiple developmental processes, but their functions in the development of mechanosensory organs are largely unknown. In the present study, we report the presence of HDAC3 in the zebrafish posterior lateral line primordium and newly deposited neuromasts. We used morpholinos to show that HDAC3 knockdown severely disrupts the development of the posterior lateral line and reduces the numbers of neuromasts and sensory hair cells within these organs. In HDAC3 morphants, we also observed decreased cell proliferation and increased apoptosis, which might lead to these defects. Finally, we show that HDAC3 deficiency results in attenuated Fgf signaling in the migrating primordium. In situ hybridizations indicate aberrant expression patterns of Notch signaling pathway genes in HDAC3 morphants. In addition, inhibition of HDAC3 function diminishes cxcr7b and alters cxcl12a expression in the migrating primordium. Our results indicate that HDAC3 plays a crucial role in regulating posterior lateral line (PLL) formation and provide evidence for epigenetic regulation in auditory organ development.