The asymmetrical and latitudinal formation of the gonads during early development in the dwarf gourami Colisa lalia was histologically observed using fish reared in laboratory. Hatching larvae obtained 33 hours after spawning possessed primordial germ cells (PGCs), which aggregated to the dorsal surface of the gut. In prolarvae on day 7, the gonadal anlagen were still situated on the dorsal surface of the gut, however, in those on day 10, the left gonadal anläge began to shift leftward, although the coelom did not develop sufficiently. In prolarvae on day 20, the right gonadal anlage also began to move leftward. During this period, the gut developed considerably in the right side of the coelom. On day 25, the developing gonads were located in the interspace of the developing spiral valve intestine. Sex differentiation of gonads appeared to begin by day 25. From those observations, we concluded that asymmetricity of gonads in C. lalia is caused by a limited space of the coelom opened on the left side of the body during the early phase of the formation of gonadal anlagen, which may be accurately determined by the position in which the gut develops.