Spt5 is a conserved essential protein that represses or stimulates transcription elongation in vitro. Immunolocalization studies on Drosophila polytene chromosomes suggest that Spt5 is associated with many loci throughout the genome. However, little is known about the prevalence and identity of Spt5 target genes in vivo during development. Here, we identify direct target genes of Spt5 using fog(sk8) zebrafish mutant, which disrupts the foggy/spt5 gene. We identified that fog(sk8) and their wildtype siblings differentially express less than 5% of genes examined. These genes participate in diverse biological processes from stress response to cell fate specification. Up-regulated genes exhibit shorter overall gene length compared to all genes examined. Through chromatin immunoprecipitation in zebrafish embryos, we identified a subset of developmentally critical genes that are bound by both Spt5 and RNA polymerase II. The protein occupancy patterns on these genes are characteristic of both repressive and stimulatory elongation regulation. Together our findings establish Spt5 as a dual regulator of transcription elongation in vivo and identify a small but diverse set of target genes critically dependent on Spt5 during development.