Ocular retardation (or) is a murine eye mutation causing microphthalmia, a thin hypocellular retina and optic nerve aplasia. Here we show that mice carrying the OrJ allele have a premature stop codon in the homeobox of the Chx10 gene, a gene expressed at high levels in uncommitted retinal progenitor cells and mature bipolar cells. No CHX10 protein was detectable in the retinal neuroepithelium of orJ homozygotes. The loss of CHX10 leads both to reduced proliferation of retinal progenitors and to a specific absence of differentiated bipolar cells. Other major retinal cell types were present and correctly positioned in the mutant retina, although rod outer segments were short and retinal lamination was incomplete. These results indicate that Chx10 is an essential component in the network of genes required for the development of the mammalian eye, with profound effects on retinal progenitor proliferation and bipolar cell specification or differentiation. off