Most animals display retarded growth in adverse conditions; however, upon the removal of unfavorable factors, they often show quick growth restoration, which is known as "catch-up" growth. In zebrafish embryos, hypoxia causes growth arrest but subsequent reoxygenation induces the catch-up growth. Here we report the role of Irs1-mediated insulin/insulin-like growth factor signaling (IIS) and the involvement of stem cells in catch-up growth in reoxygenated zebrafish embryos. Disturbed irs1 expression attenuated IIS resulting in greater growth inhibition in catch-up growth than in normal growth, and forced IIS-activation restored the catch-up growth. The irs1 knockdown induced noticeable cell-death in neural crest cells (NCCs), multipotent stem cells, under hypoxia, and the pharmacological/genetic ablation of NCCs hindered the catch-up growth. Furthermore, inhibition of the apoptotic pathway by pan-Caspase inhibition or forced activation of Akt signaling in irs1 knocked-down embryos blocked NCC cell death and rescued catch-up growth. Our data indicate this multipotent stem cell is indispensable for the embryonic catch-up growth and the Irs1-mediated IIS is prerequisite for its survival under severe adverse environments such as prolonged hypoxia.