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Mutations in RPE-specific genes and dysfunction of the RPE can lead to ocular diseases such as retinitis pigmentosa and age-related macular degeneration (AMD), the leading cause of blindness in industrialized countries. Encouraging studies demonstrate that RPE cells can be derived from human embryonic stem cells (hESCs) and can restore basic visual function when transplanted into dystrophic rat retinas.1–4 Generating and expanding RPE-like cells from stem cells, however, is difficult because of low yield and long generation times. Furthermore, isolated RPE cultures are inherently unstable, and cellular potency, function, transcriptomes, and morphologies fluctuate after only a few passages.5–7 Thus, elucidating the mechanisms underlying development and maintenance of the RPE may provide important clues for the identification of factors for generating stable homogenous cultures. The RPE and neural retina originate from forebrain-derived neuroepithelium that invaginates to form the optic cup, the outer layer of which becomes RPE and the inner layer the neural retina. At early embryonic stages, bipotential eye progenitor cells receive divergent signals based on their positions in embryologic space. These signals regulate cell fate decisions that must be continually re-enforced through the actions of intrinsic and extrinsic signaling factors to prevent a change in cell fate. Few disparate RPE-promoting factors have been identified; however, in most cases the exact mechanisms for regulating RPE-specific gene expression are not well understood.8–18 The two key transcription factors Mitf and Otx2 are essential for regulating RPE specification and differentiation. Mitf isoforms activate melanogenic and RPE terminal differentiation genes, and Mitf gene inactivation in the mouse causes RPE cells to dedifferentiate, hyperproliferate, and upregulate neural retinal markers in a process termed RPE-to-retina transdifferentiation.19–24 We and others recently reported that Mitf may be regulated by Wnt/β-catenin signaling in the RPE.10,17 RPE-specific inactivation of β-catenin induces pronounced pigment deficits and RPE-to-retina transdifferentiation. Furthermore, β-catenin binds Mitf enhancers in vivo and can transactivate these in vitro.10,17 (For a review of the Wnt/β-catenin pathway, see Ref. 25.) Conversely, β-catenin is not sufficient to influence RPE fate. Gain-of-function experiments demonstrated that Wnt/β-catenin acts to maintain an undifferentiated state of progenitor cells in the peripheral retina by repressing proneural gene expression and to promote peripheral fate by upregulating ciliary body marker expression.26–30 We hypothesize that the retinal environment is not permissive to allow Mitf induction in retinal progenitors and that additional factors besides β-catenin are necessary. In the present study, we tested the role of the candidate factor Otx2 to induce ectopic Mitf expression in the presumptive chick retina in combination with β-catenin.