The vertebrate retina develops in close proximity to the forebrain and neural crest-derived cartilages of the face and jaw. Coloboma, a congenital eye malformation, is associated with aberrant forebrain development (holoprosencephaly) and with craniofacial defects (frontonasal dysplasia) in humans, suggesting a critical role for cross-lineage interactions during retinal morphogenesis. ZIC2, a zinc-finger transcription factor, is linked to human holoprosencephaly. We have previously used morpholino assays to show zebrafish zic2 functions in the developing forebrain, retina and craniofacial cartilage. We now report that zebrafish with genetic lesions in zebrafish zic2 orthologs, zic2a and zic2b, develop with retinal coloboma and craniofacial anomalies. We demonstrate a requirement for zic2 in restricting pax2a expression and show evidence that zic2 function limits Hh signaling. RNA-seq transcriptome analysis identified an early requirement for zic2 in periocular neural crest as an activator of alx1, a transcription factor with essential roles in craniofacial and ocular morphogenesis in human and zebrafish. Collectively, these data establish zic2 mutant zebrafish as a powerful new genetic model for in-depth dissection of cell interactions and genetic controls during craniofacial complex development.