Craniofacial development is a highly conserved process that requires complex interactions between neural crest cells (NCCs) and pharyngeal tissues derived from all three germ layers. Signals emanating from the pharyngeal endoderm drive differentiation of NCCs into craniofacial cartilage, and disruption of this process underpins several human craniofacial defects (CFD). Here, we demonstrate that morpholino (MO)-mediated knockdown in zebrafish of the highly conserved transcription factor grainyhead-like 3 (grhl3), which is selectively expressed in the pharyngeal endoderm, leads to severe hypoplasia of the lower jaw cartilages. Phylogenetic analysis of conserved grhl-binding sites in gene regulatory regions identified endothelin-1 (edn1) as a putative direct grhl3 target gene, and this was confirmed by chromatin precipitation (ChIP) assays in zebrafish embryos. Injection of sub-phenotypic concentrations of MOs targeting both grhl3 and edn1 induced jaw abnormalities, and injection of edn1 mRNA into grhl3-morphants rescued both pharyngeal expression of the downstream effectors of edn1, and jaw cartilage formation. This study sheds new light on the role of endodermal endothelin-1 in vertebrate jaw development, and highlights potential new genetic defects that could underpin human CFD.