Secreted Frizzled Related Proteins (SFRPs) are a family of soluble molecules structurally related to the Wnt receptors. Functional analysis in different vertebrate species suggests that these molecules are multifunctional modulators of Wnt and possibly other signalling pathways. Sfrp1 a member of this family, is strongly expressed throughout embryonic development in different vertebrate species. Its function is, however, poorly understood. To address the role of this protein at early stages of embryonic development, we have used the medaka fish (Oryzias latipes) as a model system. Here, we describe the characterisation and the expression analysis of olSfrp1. We also show that morpholino-based interference with olSfrp1 expression results in embryos with a reduced eye field, a phenotype that, in the most affected embryos, is associated with a shortening and widening of the A–P axis. Because the expression of posterior diencephalic markers is unchanged but that of rostral telencephalic ones is expanded, we propose that olSfrp1 is needed for a proper establishment of the eye field within the forebrain. In addition, olSfrp1 may contribute to the control of mesodermal convergence extension movements that take place during gastrulation.