The neurohypophysial peptide arginine vasotocin (AVT) and its mammalian ortholog arginine vasopressin function in a wide range of physiological and behavioral events. Here, we generated a new line of transgenic medaka (Oryzias latipes), which allowed us to monitor AVT neurons by enhanced green fluorescent protein (EGFP) and demonstrate AVT neuronal development in the embryo and the projection of AVT neurons in the adult brain of avt-egfp transgenic medaka. The onset of AVT expression manifested at 2 days postfertilization (dpf) as a pair of signals in the telencephalon of the brain. The telencephalic AVT neurons migrated and converged on the preoptic area (POA) by 4dpf. At the same stage, another onset of AVT expression manifested in the central optic tectum (OT), and they migrated to the ventral part of the hypothalamus (VH) by 6dpf. In the adult brain, the AVT somata with EGFP signals existed in the gigantocellular POA (gPOA), magnocellular POA (mPOA), and parvocellular POA (pPOA) and in the VH. Whereas the major projection of AVT fibers was found from the pPOA and VH to the posterior pituitary, it was also found that AVT neurons in the three POAs send their fibers into wide regions of the brain such as the telencephalon, mesencephalon and diencephalon. This study suggests that the avt-egfp transgenic medaka is a useful model to explore AVT neuronal development and function.