Transcription factors that contain a homeodomain DNA-binding domain have crucial functions in most aspects of cellular function and embryonic development in both animals and plants. Hmx proteins are a sub-family of NK homeodomain-containing proteins that have fundamental roles in development of sensory structures such as the eye and the ear. However, Hmx functions in spinal cord development have not been analyzed. Here we show that zebrafish (Danio rerio) hmx2 and hmx3a are co-expressed in spinal dI2 and V1 interneurons, whereas hmx3b, hmx1 and hmx4 are not expressed in spinal cord. Using mutational analyses, we demonstrate that, in addition to its previously reported role in ear development, hmx3a is required for correct specification of a subset of spinal interneuron neurotransmitter phenotypes, as well as correct lateral line progression and survival to adulthood. Surprisingly, despite similar expression patterns of hmx2 and hmx3a during embryonic development, zebrafish hmx2 mutants are viable and have no obviously abnormal phenotypes in sensory structures or neurons that require hmx3a. In addition, embryos homozygous for deletions of both hmx2 and hmx3a have identical phenotypes to severe hmx3a single mutants. However, mutating hmx2 in hypomorphic hmx3a mutants that usually develop normally, results in abnormal ear and lateral line phenotypes. This suggests that while hmx2 cannot compensate for loss of hmx3a, it does function in these developmental processes, although to a much lesser extent than hmx3a. More surprisingly, our mutational analyses suggest that Hmx3a may not require its homeodomain DNA-binding domain for its roles in viability or embryonic development.