We present a description of the expression of the HNF-3 beta homolog axial (axl) in the developing zebrafish up to larva stages and compare it with that of sonic hedgehog (shh). Both genes are expressed in derivatives of all three germ layers in dynamic patterns that show substantial overlap, consistent with mutual regulatory interactions between the two genes. However, we also describe unique sites of expression of both axl and shh indicating that some aspects of their regulation are independent of one another. In no tail (ntl, zebrafish Brachyury) and floating head (flh, zebrafish Xnot1) mutants, both of which affect notochord development, early expression of axl in the organizer is unaffected, excluding a function for these genes in establishment of axl expression. At later stages, ntl and flh mutants show different effects on the expression of both axl and shh in the neuroectoderm of the trunk and tail reflecting their distinct contributions to the development of the midline mesoderm; in contrast to flh and ntl mutations whose effects are restricted to the trunk and tail, mutation of cyclops (cyc) affects axl and shh expression along the entire midline of the neuroectoderm. Endodermal expression of axl and shh is not affected by the mutations showing that development of the endoderm is under distinct control.