sonic hedgehog (shh) is expressed in anterior endoderm, where it is required to repress pancreas gene expression and to pattern the endoderm, but the pathway controlling endodermal shh expression is unclear. We find that expression of meis3, a TALE class homeodomain gene, coincides with shh expression in the endoderm of zebrafish embryos. Using a dominant negative construct or anti-sense morpholino oligos (MOs) to disrupt meis3 function, we observe ectopic insulin expression in anterior endoderm. This phenotype is also observed when meis3 MOs are targeted to the endoderm, suggesting that meis3 acts within the endoderm to restrict insulin expression. We also find that meis3 is required for endodermal shh expression, indicating that meis3 acts upstream of shh to restrict insulin expression. Loss of pbx4, a TALE gene encoding a Meis cofactor, produces the same phenotype as loss of meis3, consistent with Meis3 acting in a complex with Pbx4 as reported in other systems. Lastly, we observe a progressive anterior displacement of endoderm-derived organs upon disruption of meis3 or pbx4, apparently as a result of underdevelopment of the pharyngeal region. Our data indicate that meis3 and pbx4 regulate shh expression in anterior endoderm, thereby influencing patterning and growth of the foregut.