Zebrafish is an important model to study developmental biology and human diseases. However, an effective approach to achieve spatial and temporal gene knockout in zebrafish has not been well established. In this study, we have developed a new approach, namely bacterial artificial chromosome-rescue-based knockout (BACK), to achieve conditional gene knockout in zebrafish using the Cre/loxP system. We have successfully deleted the DiGeorge syndrome critical region gene 8 (dgcr8) in zebrafish germ line and demonstrated that the maternal-zygotic dgcr8 (MZdgcr8) embryos exhibit MZdicer-like phenotypes with morphological defects which could be rescued by miR-430, indicating that canonical microRNAs play critical role in early development. Our findings establish that Cre/loxP-mediated tissue-specific gene knockout could be achieved using this BACK strategy and that canonical microRNAs play important roles in early embryonic development in zebrafish.