In this paper, we report an in vivo model for the chimerins, a family of Rac GTPase-activating proteins (Rac-GAPs) that are uniquely regulated by the lipid second messenger diacylglycerol and have been implicated in the control of actin dynamics, migration, and proliferation. We cloned the zebrafish homologue of mammalian alpha2-chimerin (chn1) and determined that it possesses Rac-GAP activity and a C1 domain with phorbol ester/diacylglycerol-binding capability. chn1 morpholino knockdown embryos exhibit severe abnormalities, including the development of round somites, lack of yolk extension, and a kinked posterior notochord. These zebrafish morphants show Rac hyperactivation and progress faster through epiboly, leading to tailbud-stage embryos that have a narrow axis and an enlarged tailbud with expanded bmp4 and shh expression. Phenotypic rescue was achieved by mRNA microinjection of chn1 or an active chimerin Rac-GAP domain into the yolk syncytial layer but not by a chn1 mutant deficient in Rac-GAP activity, suggesting that the lack of chn1 Rac-GAP activity in the yolk syncytial layer was causative of the misbalance in morphogenetic movements. Our results reveal a crucial role for chn1 in early development and implicate Rac as a key regulator of morphogenetic movements during zebrafish epiboly.