Xenopus laevis Gremlin has been isolated as a novel dorsalizing factor, belonging to a family of secreted proteins with axial patterning activity . In a search for genes that control development in zebrafish (Danio rerio), we have identified a sequence homologous to Xenopus gremlin. This paper describes the cloning of zebrafish gremlin (grm) and its expression pattern during development. Our results show that grm encodes a maternal transcript, and the zygotic transcription is turned on at the mid-blastula transition (MBT), when grm is detected in the entire blastoderm. In the gastrula grm becomes restricted to the dorsolateral region of the embryo, and during somitogenesis it is strongly expressed in the presomitic mesoderm and developing somites, and in the ventral neural tube. From 24 hpf to 48 hpf, we show that grm transcription is downregulated in the whole embryo, even though Grm protein is still present and localized into the entire myotome at 48-72 hpf. Finally, grm transcript is strongly downregulated in fibroblast growth factor-8 (fgf8) and sonic hedgehog (shh) mutants, thus implicating a putative role of Fgf/Shh signalling loop in grm expression regulation.