Familial exudative vitreoretinopathy (FEVR) is a genetically heterogeneous disorder characterized by abnormal vascularization of the peripheral retina, which can result in retinal detachment and severe visual impairment. In a large Dutch FEVR family, we performed linkage analysis, exome sequencing, and segregation analysis of DNA variants. We identified putative disease-causing DNA variants in proline-alanine-rich ste20-related kinase (c.791dup; p.Ser265ValfsX64) and zinc finger protein 408 (ZNF408) (c.1363C>T; p.His455Tyr), the latter of which was also present in an additional Dutch FEVR family that subsequently appeared to share a common ancestor with the original family. Sequence analysis of ZNF408 in 132 additional individuals with FEVR revealed another potentially pathogenic missense variant, p.Ser126Asn, in a Japanese family. Immunolocalization studies in COS-1 cells transfected with constructs encoding the WT and mutant ZNF408 proteins, revealed that the WT and the p.Ser126Asn mutant protein show complete nuclear localization, whereas the p.His455Tyr mutant protein was localized almost exclusively in the cytoplasm. Moreover, in a cotransfection assay, the p.His455Tyr mutant protein retains the WT ZNF408 protein in the cytoplasm, suggesting that this mutation acts in a dominant-negative fashion. Finally, morpholino-induced knockdown of znf408 in zebrafish revealed defects in developing retinal and trunk vasculature, that could be rescued by coinjection of RNA encoding human WT ZNF408 but not p.His455Tyr mutant ZNF408. Together, our data strongly suggest that mutant ZNF408 results in abnormal retinal vasculogenesis in humans and is associated with FEVR.