Active zone proteins cluster synaptic vesicles at presynaptic terminals and coordinate their release. In forward genetic screens, we isolated a novel Caenorhabditis elegans active zone gene, clarinet (cla-1). cla-1 mutants exhibit defects in synaptic vesicle clustering, active zone structure and synapse number. As a result, they have reduced spontaneous vesicle release and increased synaptic depression. cla-1 mutants show defects in vesicle distribution near the presynaptic dense projection, with fewer undocked vesicles contacting the dense projection and more docked vesicles at the plasma membrane. cla-1 encodes three isoforms containing common C-terminal PDZ and C2 domains with homology to vertebrate active zone proteins Piccolo and RIM. The C-termini of all isoforms localize to the active zone. Specific loss of the ~9000 amino acid long isoform results in vesicle clustering defects and increased synaptic depression. Our data indicate that specific isoforms of clarinet serve distinct functions, regulating synapse development, vesicle clustering and release.