The transcriptional repressor Rest (Nrsf) recruits chromatin-modifying complexes to RE1 'silencer elements', which are associated with hundreds of neural genes. However, the requirement for Rest-mediated transcriptional regulation of embryonic development and cell fate is poorly understood. Conflicting views of the role of Rest in controlling cell fate have emerged from recent studies. To address these controversies, we examined the developmental requirement for Rest in zebrafish using zinc-finger nuclease-mediated gene targeting. We discovered that germ layer specification progresses normally in rest mutants despite derepression of target genes during embryogenesis. This analysis provides the first evidence that maternal rest is essential for repression of target genes during blastula stages. Surprisingly, neurogenesis proceeds largely normally in rest mutants, although abnormalities are observed within the nervous system, including defects in oligodendrocyte precursor cell development and a partial loss of facial branchiomotor neuron migration. Mutants progress normally through embryogenesis but many die as larvae (after 12 days). However, some homozygotes reach adulthood and are viable. We utilized an RE1/NRSE transgenic reporter system to dynamically monitor Rest activity. This analysis revealed that Rest is required to repress gene expression in mesodermal derivatives including muscle and notochord, as well as within the nervous system. Finally, we demonstrated that Rest is required for long-term repression of target genes in non-neural tissues in adult zebrafish. Our results point to a broad role for Rest in fine-tuning neural gene expression, rather than as a widespread regulator of neurogenesis or cell fate.