CS (chondroitin sulfate) has been implicated in a variety of biological processes during development. Its biological functions are closely associated with characteristic sulfated structures. Here, we report the characterization of a zebrafish counterpart of C4ST-1 (chondroitin 4-O-sulfotransferase-1) and its functional importance in embryogenesis. Recombinant C4ST-1 showed a substrate preference for chondroitin and catalysed the 4-O-sulfation of GalNAc residues, a highly frequent modification of CS in the embryos of zebrafish as well as other vertebrates. Whole-mount in situ hybridization revealed that C4ST-1 showed a distinct spatiotemporal expression pattern in the developing zebrafish embryo. During the segmentation stages, strong expression was observed along the body axis including the notochord and somites. Functional knockdown of C4ST-1 with specific antisense morpholino-oligonucleotides led to a marked decrease in the 4-O-sulfation and amount of CS in the embryos. Consistent with the preferential expression in the rostrocaudal axis, C4ST-1 morphants displayed morphological defects exemplified by a ventrally bent trunk and a curled and/or kinky tail, largely due to misregulated myotomal myod expression, implying perturbation of axial muscle differentiation in somites. Furthermore, the aberrant projection of spinal motor axons, which extended ventrally at the interface between the notochord and individual somites, was also observed in C4ST-1 morphants. These results suggest that 4-O-sulfated CS formed by C4ST-1 is essential for somitic muscle differentiation and motor axon guidance in zebrafish development.