Neurofibromatosis type 1 (NF1) is a common, dominantly inherited genetic disorder that results from mutations in the neurofibromin 1 (NF1) gene. Affected individuals demonstrate abnormalities in neural-crest-derived tissues that include hyperpigmented skin lesions and benign peripheral nerve sheath tumors. NF1 patients also have a predisposition to malignancies including juvenile myelomonocytic leukemia (JMML), optic glioma, glioblastoma, schwannoma and malignant peripheral nerve sheath tumors (MPNSTs). In an effort to better define the molecular and cellular determinants of NF1 disease pathogenesis in vivo, we employed targeted mutagenesis strategies to generate zebrafish harboring stable germline mutations in nf1a and nf1b, orthologues of NF1. Animals homozygous for loss-of-function alleles of nf1a or nf1b alone are phenotypically normal and viable. Homozygous loss of both alleles in combination generates larval phenotypes that resemble aspects of the human disease and results in larval lethality between 7 and 10 days post fertilization. nf1-null larvae demonstrate significant central and peripheral nervous system defects. These include aberrant proliferation and differentiation of oligodendrocyte progenitor cells (OPCs), dysmorphic myelin sheaths and hyperplasia of Schwann cells. Loss of nf1 contributes to tumorigenesis as demonstrated by an accelerated onset and increased penetrance of high-grade gliomas and MPNSTs in adult nf1a(+/-); nf1b(-/-); p53(e7/e7) animals. nf1-null larvae also demonstrate significant motor and learning defects. Importantly, we identify and quantitatively analyze a novel melanophore phenotype in nf1-null larvae, providing the first animal model of the pathognomonic pigmentation lesions of NF1. Together, these findings support a role for nf1a and nf1b as potent tumor suppressor genes that also function in the development of both central and peripheral glial cells as well as melanophores in zebrafish.