ABSTRACT: Neural crest cells give rise to the craniofacial skeleton and multiple pigment cell lineages, yet how duplicated developmental regulators partition their ancestral functions after teleost-specific whole-genome duplication remains unclear. Here, we employed CRISPR/Cas9 to generate alx4a and alx4b single and double mutants in Nile tilapia (Oreochromis niloticus). By integrating phenotype, skeleton, transcriptome, quantitative PCR, and AlphaFold-based structural modeling analyses, we revealed their functional divergence. Loss of alx4a caused a regionally restricted reduction in iridophore-derived reflectance, abnormal cranial morphology, and impaired opercular ossification, whereas alx4b single mutants showed no detectable phenotype. By contrast, double mutants exhibited an almost complete loss of iridophore-derived structural coloration and substantially more severe cranial defects, including impaired ossification of the mandible and operculum. Skin transcriptomic and quantitative PCR analyses revealed marked downregulation of pnp4a and tfec, which are associated with iridophore differentiation and coloration, whereas the iridophore survival-related genes ltk and mpv17 remained largely unchanged. AlphaFold-based protein–DNA modeling further predicted a stronger potential interaction between ALX4A and the pnp4a promoter with a binding energy of −6.6 kcal mol⁻¹, consistent with a potential direct regulatory relationship. In contrast, the development and coloration of melanophores, xanthophores, and erythrophores, as well as dorsal-fin spine formation, were not detectably affected. Together, these findings support asymmetric subfunctionalization of alx4a and alx4b, with alx4a acting as the dominant paralog in iridophore differentiation and both paralogs contributing cooperatively to cranial ossification, and identify pnp4a as a candidate downstream target of alx4a.