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Purpose: The present study was aimed at defining developmental roles of Smad4, a key mediator of the TGF-β superfamily signaling system, in the embryonic mouse retina., Methods: Using a Cre/loxP-mediated conditional gene targeting approach, Smad4 gene function was deleted from the embryonic mouse retina. Mutant phenotypes were morphologically and molecularly examined., Results: Loss of Smad4 in the developing retina led to varying degrees of microphthalmia at birth, presumably because of elevated apoptosis observed transiently at embryonic day 12.5 in the developing retina. This was also associated with an apparent delay in accumulation of retinal ganglion cells. Smad4 conditional mutants also exhibited alterations of retinal spatial patterning along the dorsal-ventral axis, consistent with a known function of BMP signaling in the embryonic retina. However, despite a known role for BMP signaling in retinal cell survival, proliferation, and differentiation, Smad4 mutant retinal progenitor cells were capable of maintaining growth and neurogenesis throughout embryonic development. We also found that the loss of Smad4 led to abnormal targeting of retinal ganglion cell axons to the optic nerve head, a phenotype consistent with reduced BMP signaling in the developing retina., Conclusions: These results suggest that Smad4 is essential for a subset of, but not all, TGF-β/BMP-dependent developmental processes in the embryonic retina. In addition, genetic requirements for Smad4 in the embryonic retina are evident predominantly in the developmental events regulated by the BMP branch of the TGF-β signaling pathway.