RNA ligases are essential for the repair, splicing, and editing of RNA across various biological systems. Recently, a new enzyme that catalyses 5’-3’ RNA ligation – RNA ligase 1 (Rlig1) – was identified in vitro. However, the in vivo biological functions of Rlig1 have remained elusive. Here, we reveal the role of Rlig1 during vertebrate development using embryonic and larval zebrafish as a model system. We found that rlig1 mRNA is maternally deposited and present ubiquitously during early embryogenesis, whereas at larval stages it localises to the brain and eyes. Interestingly, CRISPR/Cas9-generated rlig1 knockout zebrafish exhibited no overt morphological abnormalities, but showed reduced behavioural responsiveness to visual stimuli along with massively perturbed transcriptomes and widespread dysregulation of core metabolic and translational pathways. Brain-wide calcium imaging in rlig1 knockout larvae revealed decreased neuronal activity in key regions for visual processing, consistent with the observed behavioural defects. Together, our findings identify a role for Rlig1 in maintaining the integrity and function of the nervous system and uncover a new link between neuronal RNA processing, development, and sensory-motor computation.