The lateral line system is a mechanosensory systems present in aquatic animals. The anterior and posterior lateral lines develop from anterior and posterior lateral line placodes (aLLp and pLLp), respectively. Although signaling molecules required for the induction of other cranial placodes have been well studied, the molecular mechanisms underlying formation of the lateral line placodes are unknown. In this study we tested the requirement of multiple signaling pathways, such as Wnt, Bmp Fgf, and Retinoic Acid for aLLp and pLLp induction. We determined that aLLp specification requires Fgf signaling, whilst pLLp specification requires retinoic acid which inhibits Fgf signaling. pLLp induction is also independent of Wnt and Bmp activities, even though these pathways limit the boundaries of the pLLp. This is the first report that the aLLp and pLLp depend on different inductive mechanisms and that pLLp induction requires the inhibition of Fgf, Wnt and Bmp signaling.