Phospholipase D (PLD) hydrolyzes phosphatidylcholine to generate phosphatidic acid and choline. Studies in cultured cells and Drosophila melanogaster have implicated PLD in the regulation of many cellular functions, including intracellular vesicle trafficking, cell proliferation and differentiation. However, the function of PLD in vertebrate development has not been explored. Here we report cloning and characterization of a zebrafish PLD1 (pld1) homolog. Like mammalian PLDs, zebrafish Pld1 contains two conservative HKD motifs. Maternally contributed pld1 transcripts are uniformly distributed in early embryo. Localized expression of pld1 is observed in the notochord during early segmentation, in the somites during later segmentation and in the liver at the larval stages. Studies in intact and cell-free preparations demonstrate evolutionary conservation of regulation. Inhibition of Pld1 expression using antisense morpholino oligonucleotides (MO) interfering with the translation or splicing of pld1 impaired intersegmental vessel (ISV) development. Incubating embryos with 1-butanol, which diverts production of phosphatidic acid to a phosphatidylalcohol, caused similar ISV defects. To determine where Pld1 is required for ISV development we performed transplantation experiments. Analyses of the mosaic Pld1 deficient embryos showed partial suppression of ISV defects in the segments containing transplanted wild-type notochord cells but not in the ones containing wild-type somitic cells. These results provide the first evidence that function of Pld1 in the developing notochord is essential for vascular development in vertebrates.