We identified a zebrafish caudal-related homeobox (cdx1b) gene, which shares syntenic conservation with both human and mouse Cdx1. Zebrafish cdx1b transcripts are maternally deposited. cdx1b is uniformly expressed in both epiblast and hypoblast cells from late gastrulation to the 1-2s stages and can be identified in the retinas, brain and somites during 18-22 hpf stages. After 28 hours of development, cdx1b is exclusively expressed in the developing intestine. Both antisense morpholino oligonucleotide-mediated knockdown and overexpression experiments were conducted to analyze cdx1b function. Hypoplastic development of the liver and pancreas and intestinal abnormalities were observed in 96 hpf cdx1b morphants. In 85% epiboly cdx1b morphants, twofold decreases in the respective numbers of gata5-, cas-, foxa2- and sox17-expressing endodermal precursors were identified. Furthermore, ectopic cdx1b expression caused substantial increases in the respective numbers of gata5-, cas-, foxa2- and sox17-expressing endodermal precursors and altered their distribution patterns in 85% epiboly injected embryos. Conserved Cdx1-binding motifs were identified in both gata5 and foxa2 genes by interspecific sequence comparisons. Cdx1b can bind to the Cdx1-binding motif located in intron 1 of the foxa2 gene based on an electrophoretic mobility shift assay. Co-injection of either zebrafish or mouse foxa2 mRNA with the cdx1b MO rescued the expression domains of ceruloplasmin in the liver of 53 hpf injected embryos. These results indicate that zebrafish cdx1b regulates foxa2 expression and may also modulate gata5 expression, thus affecting early endoderm formation. This study underscores a novel role of zebrafish cdx1b in the development of different digestive organs compared with its mammalian homologs.