Targeted gene expression is a powerful approach to study the function of genes and cells in vivo. In Drosophila, the P element-mediated Gal4-UAS method has been successfully used for this purpose. However, similar methods have not been established in vertebrates. Here we report the development of a targeted gene expression methodology in zebrafish based on the Tol2 transposable element and its application to the functional study of neural circuits. First, we developed gene trap and enhancer trap constructs carrying an engineered yeast Gal4 transcription activator (Gal4FF) and transgenic reporter fish carrying the GFP or the RFP gene downstream of the Gal4 recognition sequence (UAS) and showed that the Gal4FF can activate transcription through UAS in zebrafish. Second, by using this Gal4FF-UAS system, we performed large-scale screens and generated a large collection of fish lines that expressed Gal4FF in specific tissues, cells, and organs. Finally, we developed transgenic effector fish carrying the tetanus toxin light chain (TeTxLC) gene downstream of UAS, which is known to block synaptic transmission. We crossed the Gal4FF fish with the UAS:TeTxLC fish and analyzed double transgenic embryos for defects in touch response. From this analysis, we discovered that targeted expression of TeTxLC in distinct populations of neurons in the brain and the spinal cord caused distinct abnormalities in the touch response behavior. These studies illustrate that our Gal4FF gene trap and enhancer trap methods should be an important resource for genetic analysis of neuronal functions and behavior in vertebrates.