The rx/Rax gene is a conserved homeobox transcription factor that is known to play an important role in the development of the eye. Mutations in rx/Rax gene manifest in the congenital loss of eyes known as anophthlamia or the development of small-eyes; microphthlamia. Despite numerous literatures describing the expression of Rx/Rax in the anterior hypothalamus of several model organisms, its function there is still hugely unknown and remains to be investigated. In order to gain insight into the role of rx, I have performed experiments aimed at understanding the signalling events governing the expression and function of rx3, a homologue of rx/Rax, in the anterior hypothalamus of the embryonic zebrafish model system. Several studies have shown the reduction of pomc expressing neurons in the arcuate nucleus ofthe hypothalamus when the function of rx3/Rax is compromised. Here I have shown that rx3 may, together with the signalling molecule sonic hedgehog (Shh), act to specify and promote the differentiation of progenitor cells to the Pomc cell fate. The functional loss of either rx3 or Shh leads to a decrease in the number of pomc expressing neurons in the arcuate nucleus; located adjacent to the rx3 and shh expressing domains at the anterior hypothalamus. Further analyses reveal that rx3 and Shh may mutually activate each other's expression during the early establishment of the anterior dorsal hypothalamus. Experiments also show that Fgf may operate upstream of rx3 to regulate its expression; as well as the number of pomc positive cells in the arcuate nucleus. These studies show for the first time, a role for rx3 in the development of the anterior hypothalamus and the differentiation of pomc positive progenitors in the arcuate nucleus through its interaction with Shh. Additionally, I have found the signalling factors Shh and Fgf3 to be maintained in the adult zebrafish hypothalamus. Furthermore, I have evidence to suggest a role for Shh in governing the proliferation of neural progenitor cells in the medial hypothalamus of the adult zebrafish. This study is the first to investigate neural stem/progenitor cells in the hypothalamus of the adult zebrafish.