FOXE1 mutations in humans are associated with Bamforth-Lazarus syndrome, characterized by cleft palate and hypothyroidism. Moreover, polymorphisms of FOXE1 are implicated in non- syndromic cleft palate. Much uncertainty still exists about the function of transcription factor FOXE1 in development. To address this, we have previously developed a foxe1 mutant zebrafish demonstrating mineralization defects in larvae. In the present study, we further investigate the thyroid status and skeletal phenotype of adult foxe1 mutants. Compared to wild type controls, mutant fish have increased expression of hypothalamic tshb, and hepatic dio1 and dio2. In plasma we found higher circulating Mg levels, together these findings are indicative of hypothyroidism. We further observed mineralization defects in scales, likely due to enhanced osteoclast activity as measured by increased expression levels of the markers tracp, ctsk and rankl. Gene-environment interactions in the etiology of FOXE1-related craniofacial abnormalities remain elusive, which prompts the need for models to investigate genotype-phenotype associations. We here investigated whether ethanol exposure increases the risk of developing craniofacial malformations in foxe1 mutant larvae that we compared to wild types. We found in ethanol-exposed mutants an increased incidence of developmental malformations and marked changes in gene expression patterns of cartilage markers (sox9a), apoptotic markers (casp3b), retinoic acid metabolism (cyp26c1), and tissue hypoxia markers (hifaa, hifab). Taken together, this study shows that the foxe1 mutant zebrafish recapitulates phenotypes associated with FOXE1 mutations in human patients and a clear foxe1-ethanol interaction.