Protein activities controlled by receptor protein tyrosine phosphatases (RPTPs) play comparably important roles in transducing cell surface signals into the cytoplasm by protein tyrosine kinases. Previous studies showed that several RPTPs are involved in neuronal generation, migration, and axon guidance in Drosophila, and the vertebrate hippocampus, retina, and developing limbs. However, whether the protein tyrosine phosphatase type O (ptpro), one kind of RPTP, participates in regulating vertebrate brain development is largely unknown. We isolated the zebrafish ptpro gene and found that its transcripts are primarily expressed in the embryonic and adult central nervous system. Depletion of zebrafish embryonic Ptpro by antisense morpholino oligonucleotide knockdown resulted in prominent defects in the forebrain and cerebellum, and the injected larvae died on the 4th day post-fertilization (dpf). We further investigated the function of ptpro in cerebellar development and found that the expression of ephrin-A5b (efnA5b), a Fgf signaling induced cerebellum patterning factor, was decreased while the expression of dusp6, a negative-feedback gene of Fgf signaling in the midbrain-hindbrain boundary region, was notably induced in ptpro morphants. Further analyses demonstrated that cerebellar defects of ptpro morphants were partially rescued by inhibiting Fgf signaling. Moreover, Ptpro physically interacted with the Fgf receptor 1a (Fgfr1a) and dephosphorylated Fgfr1a in a dose-dependant manner. Therefore, our findings demonstrate that Ptpro activity is required for patterning the zebrafish embryonic brain. Specifically, Ptpro regulates cerebellar formation during zebrafish development through modulating Fgf signaling.