Zinc-finger nucleases (ZFNs) are artificial enzymes that create site-specific double-strand breaks and thereby induce targeted genome editing. Here, we demonstrated successful gene disruption in somatic and germ cells of medaka (Oryzias latipes) using ZFN to target exogenous EGFP genes. Embryos that were injected with an RNA sequence pair coding for ZFNs showed mosaic loss of green fluorescent protein fluorescence in skeletal muscle. A number of mutations that included both deletions and insertions were identified within the ZFN target site in each embryo, whereas no mutations were found at the non-targeted sites. In addition, ZFN-induced mutations were introduced in germ cells and efficiently transmitted to the next generation. The mutation frequency varied (6–100%) in the germ cells from each founder, and a founder carried more than two types of mutation in germ cells. Our results have introduced the possibility of targeted gene disruption and reverse genetics in medaka.