A number of studies have suggested that retinoic acid (RA) is an important signal for patterning the hindbrain, the branchial arches and the limb bud. Retinoic acid is thought to act on the posterior hindbrain and the limb buds at somitogenesis stages in chick and mouse embryos. Here we report a much earlier requirement for RA signalling during pre-segmentation stages for proper development of these structures in zebrafish. We present evidence that a RA signal is necessary during pre-segmentation stages for proper expression of the spinal cord markers hoxb5a and hoxb6b, suggesting an influence of RA on anteroposterior patterning of the neural plate posterior to the hindbrain. We report the identification and expression pattern of the zebrafish retinaldehyde dehydrogenase2 (raldh2/aldh1a2) gene. Raldh2 synthesises retinoic acid (RA) from its immediate precursor retinal. It is expressed in a highly ordered spatial and temporal fashion during gastrulation in the involuting mesoderm and during later embryogenesis in paraxial mesoderm, branchial arches, eyes and fin buds, suggesting the involvement of RA at different times of development in different functional contexts. Mapping of the raldh2 gene reveals close linkage to no-fin (nof), a newly discovered mutant lacking pectoral fins and cartilaginous gill arches. Cloning and functional tests of the wild-type and nof alleles of raldh2 reveal that nof is a raldh2 mutant. By treating nof mutants with RA during different time windows and by making use of a retinoic acid receptor antagonist, we show that RA signalling during pre-segmentation stages is necessary for anteroposterior patterning in the CNS and for fin induction to occur.