Adenosine deaminases (ADARs) catalyze the deamination of adenosine to inosine, also known as A-to-I editing, in RNA. Although A-to-I editing occurs widely across animals and is well studied, new biological roles are still being discovered. Here, we study the role of A-to-I editing in early zebrafish development. We demonstrate that Adar, the zebrafish orthologue of mammalian ADAR1, is essential for establishing the antero-posterior and dorso-ventral axes and patterning. Genome-wide editing discovery reveals pervasive editing in maternal and the earliest zygotic transcripts, the majority of which occurred in the 3'-UTR. Interestingly, transcripts implicated in gastrulation as well as dorso-ventral and antero-posterior patterning are found to contain multiple editing sites. Adar knockdown or overexpression affect gene expression by 12 hpf. Analysis of adar-/- zygotic mutants further reveals that the previously described role of Adar in mammals in regulating the innate immune response is conserved in zebrafish. Our study therefore establishes distinct maternal and zygotic functions of RNA editing by Adar in embryonic patterning along the zebrafish antero-posterior and dorso-ventral axes, and in the regulation of the innate immune response, respectively.