1-Phenyl 2-thiourea (PTU) is a tyrosinase inhibitor commonly used to block pigmentation and aid visualization of zebrafish development. At the standard concentration of 0.003% (200 µM), PTU inhibits melanogenesis and reportedly has minimal other effects on zebrafish embryogenesis. We found that 0.003% PTU altered retinoic acid and insulin-like growth factor (IGF) regulation of neural crest and mesodermal components of craniofacial development. Reduction of retinoic acid synthesis by the pan-aldehyde dehydrogenase inhibitor diethylbenzaldehyde, only when combined with 0.003% PTU, resulted in extraocular muscle disorganization. PTU also decreased retinoic acid-induced teratogenic effects on pharyngeal arch and jaw cartilage despite morphologically normal appearing PTU-treated controls. Furthermore, 0.003% PTU in combination with inhibition of IGF signaling through either morpholino knockdown or pharmacologic inhibition of tyrosine kinase receptor phosphorylation, disrupted jaw development and extraocular muscle organization. PTU in and of itself inhibited neural crest development at higher concentrations (0.03%) and had the greatest inhibitory effect when added prior to 22 hours post fertilization (hpf). Addition of 0.003% PTU between 4 and 20 hpf decreased thyroxine (T4) in thyroid follicles in the nasopharynx of 96 hpf embryos. Treatment with exogenous triiodothyronine (T3) and T4 improved, but did not completely rescue, PTU-induced neural crest defects. Thus, PTU should be used with caution when studying zebrafish embryogenesis as it alters the threshold of different signaling pathways important during craniofacial development. The effects of PTU on neural crest development are partially caused by thyroid hormone signaling.