Wnts have been shown to provide a posteriorizing signal that has to be repressed in the specification of vertebrate forebrain region. Previous studies have shown that Wnt activation by LiCl treatment causes an expansion of optic stalk and mid-hindbrain boundary, whereas eye and ventral diencephalon in the forebrain region were reduced. However, the molecular mechanism, by which inhibits Wnt activity in the forebrain remains poorly defined. To investigate relationship between forebrain specification and Wnt signaling, the zebrafish homologue of secreted frizzled related protein1 (sfrp1) has been characterized. The transcripts of sfrp1 are detected in the presumptive forebrain at gastrula and in the ventral telencephalon, ventral diencephalon, midbrain and optic vesicles at 24h after postfertilization (hpf). Overexpression of sfrp1 causes an anteriorization of embryo, with enlarged head and reduced posterior structure as in the embryo overexpressing dominant-negative form of Frizzled8a or Dkk1. Its overexpression restored the eye defects in the Wnt8b-overexpressing embryos, but not in the LiCl-treated embryos. These results suggest that Sfrp1 expressed in the forebrain and eye field plays a critical role in the extracellular events of antagonizing Wnt activity for the forebrain specification.