In this article, we investigate the expression, regulation, and function of the zebrafish forkhead gene foxe3. In wild type embryos, foxe3 is first expressed in a crescent‐shaped area at the anterior end of the prechordal plate, corresponding to the polster. At later stages, the hatching gland, the lens, and the anterior pituitary express this gene. Using morpholinos against the zinc finger Kruppel‐like factor 4 (KLF4) we show that foxe3 is regulated differently in the polster and in the lens. In the absence of KLF4, expression of foxe3 in the polster is not activated, whereas in the lens placode the expression of KLF4 is not required for the transcription of foxe3. The expression of foxe3 is also regulated by the hedgehog and nodal signaling pathways. foxe3 expression is altered in the hedgehog pathway mutants iguana and you‐too and the nodal pathway mutant cyclops. foxe3 function is necessary for the execution of lens‐specific gene expression and lens morphogenesis, as the knockdown of foxe3 results in a loss of platelet‐derived growth factor receptor alpha (pdgfrα) expression and in the vacuolization of the lens. 46:177–183, 2008. © 2008 Wiley‐Liss, Inc.