Members of the onecut family of transcription factors play important roles in the development of the liver and pancreas. We have shown previously that onecut1 (hnf6) is important during the terminal stages of intrahepatic biliary development in zebrafish. Here we report the characterization of a third zebrafish onecut gene, onecut3 (oc3), and assay its expression during development and its role in biliary duct formation using morpholino antisense oligonucleotide‐mediated knockdown. These experiments reveal an important role for oc3 during the earliest stages of zebrafish biliary development, and suggest that zebrafish oc3 is the functional ortholog of mammalian hnf6, a gene that directs biliary differentiation from bipotential progenitor cells. Consistent with this, zebrafish hnf6 expression was significantly reduced in oc3‐deficient larvae. Knockdown of hnf6 in wild‐type zebrafish larvae also significantly reduced oc3 expression, suggesting a complex interaction between onecut family member proteins during the latter stages of zebrafish biliary development. Developmental Dynamics 237:124–131, 2008. © 2007 Wiley‐Liss, Inc.