Development of an animal embryo involves the coordination of cell divisions, a variety of inductive interactions and extensive cellular rearrangements. One of the biggest challenges in developmental biology is to explain the relationships between these processes and the mechanisms that regulate them. Teleost embryos provide an ideal subject for the study of these issues. Their optical lucidity combined with modern techniques for the marking and observation of individual living cells allow high resolution investigations of specific morphogenetic movements and the construction of detailed fate maps. In this review we describe the patterns of cell divisions, cellular movements and other morphogenetic events during zebrafish early development and discuss how these events relate to the formation of restricted lineages.