Mutations in the human nuclear receptor, DAX1, cause X-linked adrenal hypoplasia congenita (AHC). We report the isolation and characterization of a DAX1 homologue, dax1, in zebrafish. The dax1 cDNA encodes a protein of 264 amino acids, including the conserved carboxy-terminal ligand binding-like (LBL) motif; but the amino-terminal region lacks the unusual repeats of the DNA binding-like (DBL) domain in mammals. Genomic sequence analysis indicates that the dax1 gene structure is conserved also. Whole mount in situ hybridization (ISH) revealed the onset of dax1 expression in the developing hypothalamus at 26 h post fertilization (hpf). Later, at 28 hpf, a novel expression domain for dax1 appeared in the trunk. This bilateral dax1-expressing structure was located immediately above the yolk sac, between the otic vesicle and the pronephros. Interestingly, weak and transient expression of dax1 was observed in the interrenal glands (adrenal cortical equivalents) at 31 hpf. This gene was also expressed in the liver after 3 dpf in the zebrafish larvae. Disruption of dax1 function by morpholino oligonucleotides (MO) downregulated expression of steroidogenic genes, cyp11a and star, and led to severe phenotypes similar to ff1b (SF1) MO injected embryos. Injection of dax1 MO did not affect ff1b expression, while ff1b MO abolished dax1 expression in the interrenal organ. Based on these results, we propose that dax1 is the mammalian DAX1 ortholog, functions downstream of ff1b in the regulatory cascades, and is required for normal development and function of the zebrafish interrenal organ.