The Shwachman-Diamond syndrome (SDS) is characterized by exocrine pancreatic insufficiency, neutrophil defect, and skeletal abnormalities. The molecular basis for this syndrome was recently identified as a defect in a novel nucleolar protein termed the Shwachman-Bodian-Diamond syndrome (SBDS) protein. Beyond human pathologic descriptions, there are little data addressing the role of SBDS during pancreas and granulocytes development. We hypothesize that sbds gene function is essential for pancreas and myeloid development in the zebrafish. By homology searching, we identified the zebrafish sbds ortholog and then analyzed its expression by reverse transcriptase-polymerase chain reaction and in situ hybridization. We found that the sbds gene is expressed dynamically during development. To study the function of sbds during development, we induced loss of gene function by morpholino-mediated gene knockdown. The knockdown induced a morphogenetic defect in the pancreas, altering the spatial relationship between exocrine and endocrine components. We also noted granulopoiesis defect using myeloperoxidase as a marker. We conclude that sbds function is essential for normal pancreas and myeloid development in zebrafish. These data provide novel insight into the role of the sbds gene and support using zebrafish as a model system to study sbds gene function and for evaluation of novel therapies.