Arthrogryposis-renal dysfunction-cholestasis syndrome (ARC) is a rare cause of cholestasis in infants. Causative mutations in VPS33B, a gene that encodes a Class C vacuolar sorting protein, have recently been reported in individuals with ARC. We have identified a zebrafish vps33b-ortholog that is expressed in developing liver and intestine. Knockdown of vps33b causes bile duct paucity and impairs intestinal lipid absorption, thus phenocopying digestive defects characteristic of ARC. By contrast, neither motor axon nor kidney epithelial defects typically seen in ARC could be identified in vps33b-deficient larvae. Biliary defects in vps33b-deficient zebrafish larvae closely resemble the bile duct paucity associated with knockdown of the onecut transcription factor hnf6. Consistent with this, reduced vps33b expression was evident in hnf6-deficient larvae and in larvae with mutation of vhnf1, a downstream target of hnf6. Zebrafish vhnf1, but not hnf6, increases vps33b expression in zebrafish embryos and in mammalian liver cells. Electrophoretic mobility shift assays suggest that this regulation occurs through direct binding of vHnf1 to the vps33b promoter. These findings identify vps33b as a novel downstream target gene of the hnf6/vhnf1 pathway that regulates bile duct development in zebrafish. Furthermore, they show that tissue-specific roles for genes that regulate trafficking of intracellular proteins have been modified during vertebrate evolution.