GnRH neurons secrete GnRH that controls the development of the reproduction system. Despite many studies, the signals controlling the development of GnRH neurons from its progenitors have not been fully established. To understand the development of GnRH neurons, we examined the development of gnrh3-expressing cells using a transgenic zebrafish line that expresses green fluorescent protein (GFP) and LacZ driven by the gnrh3 promoter. GFP and LacZ expression recapitulated that of gnrh3 in the olfactory region, olfactory bulb and telencephalon. Depletion of gnrh3 by morpholinos led to a reduction of GFP- and gnrh3-expressing cells, while over-expression of gnrh3 mRNA increased the number of these cells. This result indicates a positive feed-forward regulation of gnrh3 cells by gnrh3. The gnrh3 cells were absent in embryos that lack Hedgehog signaling, but their numbers were increased in embryos overexpressing shhb. We manipulated the amounts of kinase that antagonizes the Hedgehog signaling pathway, protein kinase A (PKA), by treating embryos with PKA activator forskolin or by injecting mRNAs encoding its constitutively active catalytic subunit (PKA*) and dominant negative regulatory subunit (PKI) into zebrafish embryos. PKA* misexpression or forskolin treatment decreased GFP cell numbers, while PKI misexpression led to ectopic production of GFP cells. Our data indicate that the Hedgehog-PKA pathway participates in the development of gnrh3-expressing neurons during embryogenesis.