To gain insight into the mechanisms of Lmx1b function during ocular morphogenesis, we have studied the roles of lmx1b.1 and lmx1b.2 during zebrafish eye development. In situ hybridization and characterization of transgenic lines in which GFP is expressed under lmx1b.1 regulatory sequence show that these genes are expressed in periocular tissues and in a pattern conserved with other vertebrates. Anti-sense morpholinos against lmx1b.1 and lmx1b.2 result in defective migration of periocular mesenchymal cells around the eye and lead to apoptosis of these cells. These defects in the periocular mesenchyme are correlated with a failure in fusion of the choroid fissure or in some instances, more severe ventral optic cup morphogenesis phenotypes. Indeed, by blocking the death of the periocular mesenchyme in Lmx1b morphants, optic vesicle morphogenesis is largely restored. Within the retina of lmx1b morphants, Fgf activity is transiently up-regulated and these morphants show defective naso-temporal patterning. Epistasis experiments indicate that the increase in Fgf activity is partially responsible for the ocular anomalies caused by loss of Lmx1b function. Overall, we propose zebrafish lmx1b.1 and lmx1b.2 promote the survival of periocular mesenchymal cells that influence multiple signaling events required for proper ocular development.