The regulation of cell cycle rate is essential for the correct timing of proliferation and differentiation during development. Changes to cell cycle rate can have profound effects on the size, shape and cell types of a developing organ. We previously identified a zebrafish mutant ceylon (cey) that has a severe reduction in T cells and hematopoietic stem/progenitor cells (HSPCs). Here we find that the cey phenotype is due to absence of the gene transducin (beta)-like 3 (tbl3). The tbl3 homolog in yeast regulates the cell cycle by maintaining rRNA levels and preventing p53-induced cell death. Zebrafish tbl3 is maternally expressed, but later in development its expression is restricted to specific tissues. Tissues expressing tbl3 are severely reduced in cey mutants, including HSPCs, the retina, exocrine pancreas, intestine, and jaw cartilage. Specification of these tissues is normal, suggesting the reduced size is due to a reduced number of differentiated cells. Tbl3 MO injection into either wild-type or p53/ mutant embryos phenocopies cey, indicating that loss of tbl3 causes specific defects in cey. Progression of both hematopoietic and retinal development is delayed beginning at 3 day post fertilization due to a slowing of the cell cycle. In contrast to yeast, reduction of Tbl3 causes a slowing of the cell cycle without a corresponding increase in p53 induced cell death. These data suggest that tbl3 plays a tissue-specific role regulating cell cycle rate during development.