The crucial involvement of CLIM/NLI/Ldb cofactors for the exertion of the biological activity of LIM homeodomain transcription factors (LIM-HD) has been demonstrated. In this paper we show that CLIM cofactors are widely expressed during zebrafish development with high protein levels in specific neuronal cell types where LIM-HD proteins of the Isl class are synthesized. The overexpression of a dominant-negative CLIM molecule (DN-CLIM) that contains the LIM interaction domain (LID) during early developmental stages of zebrafish embryos results in an impairment of eye and midbrain-hindbrain boundary (MHB) development and disturbances in the formation of the anterior midline. On a cellular level we show that the outgrowth of peripheral but not central axons from Rohon Beard (RB) and trigeminal sensory neurons is inhibited by DN-CLIM overexpression. We demonstrate a further critical role of CLIM cofactors for axonal outgrowth of motor neurons. Additionally, DN-CLIM overexpression causes an increase of Isl-protein expression levels in specific neuronal cell types, likely due to a protection of the DN-CLIM/LIM-HD complex from proteasomal degradation. Our results demonstrate multiple roles of the CLIM cofactor family for the development of entire organs, axonal outgrowth of specific neurons and protein expression levels.