Nerve activity is known to be an important regulator of muscle phenotype in the adult, but its contribution to muscle development during embryogenesis remains unresolved. We used the zebrafish embryo and in vivo imaging approaches to address the role of activity-generated signals, acetylcholine and intracellular calcium, in vertebrate slow muscle development. We show that acetylcholine drives initial muscle contraction and embryonic movement via release of intracellular calcium from ryanodine receptors. Inhibition of this activity-dependent pathway at the level of the acetylcholine receptor or ryanodine receptor did not disrupt slow fibre number, elongation or migration but affected myofibril organisation. In mutants lacking functional acetylcholine receptors myofibre length increased and sarcomere length decreased significantly. We propose that calcium is acting via the cytoskeleton to regulate myofibril organisation. Within a myofibre, sarcomere length and number are the key parameters regulating force generation; hence our findings imply a critical role for nerve-mediated calcium signals in the formation of physiologically functional muscle units during development.