Background: The zebrafish ladybird homeobox homologous gene 2 (lbx2) has been suggested to play a key role in the regulation of hypaxial myogenic precursor cell migration. Unlike their lbx counterparts in mammals, the function of teleost lbx genes beyond myogenesis during embryonic development remains unexplored. Principal Findings: Abrogation of lbx2 function using a specific independent morpholino oligonucleotide (MO) or truncated lbx2 mRNA with an engrailed domain deletion (lbx2(eh-)) resulted in defective formation of the zebrafish posterior lateral line (PLL). Migration of the PLL primordium was altered and accompanied by increased cell death in the primordium of lbx2-MO-injected embryos. A decreased number of muscle pioneer cells and impaired expression pattern of sdf1a in the horizontal myoseptum was observed in lbx2 morphants. Significance: Injection of lbx2 MO or lbx2(eh-) mRNA resulted in defective PPL formation and altered sdf1a expression, confirming an important function for lbx2 in sdf1a-dependent migration. In addition, the disassociation of PPL nerve extension with PLL primordial migration in some lbx2 morphants suggests that pathfinding of the PLL primordium and the lateral line nerve may be regulated independently.