Cardiovascular malformations are one of the most common congenital birth defects observed in humans. Defects in cardiac valves disrupt normal blood flow. Zebrafish are an outstanding experimental model for studying the effects that environmental contaminants have on developmental processes. Previous research has shown that 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) causes blood regurgitation in the heart and reduces peripheral blood flow in embryonic zebrafish, suggesting some form of valve failure. To test this we used video microscopy to examine valve function and structure in developing zebrafish exposed to TCDD. TCDD exposure produced blood regurgitation at both the atrioventricular (AV) and bulboventricular (BV) junctions. In marked contrast to control embryos exposed to the vehicle dimethyl sulfoxide, embryos exposed to TCDD failed to form valve leaflets as the heart matured. In addition, whereas TCDD did not block initial formation of the bulbus arteriosus, we found that TCDD exposure prevented the normal growth and development of this portion of the outflow tract. TCDD altered the localization of endothelial cells at the AV and BV junctions and altered the localized expression of mRNAs bmp4 and notch1b normally associated with the nascent valves. Taken together, our results demonstrate that although TCDD does not prevent the initial specification of the presumptive valve locations, TCDD exposure produces severe alterations in valve development, leading to blood regurgitation and failing circulation in the developing zebrafish.