Vertebrate eye development requires a series of complex morphogenetic and inductive events to produce a lens vesicle centered within the bilayered optic cup and a posteriorly positioned optic stalk. Multiple congenital eye defects, including microphthalmia and coloboma, result from defects in early eye morphogenesis. Cdo is a multifunctional cell surface immunoglobulin superfamily member that interacts with and mediates signaling by cadherins and netrins to regulate myogenesis. In addition, Cdo plays an essential role in early forebrain development by functioning as coreceptor for sonic hedgehog. It is reported here that Cdo is expressed in a dynamic, but dorsally restricted, fashion during early eye development, and that mice lacking Cdo display multiple eye defects. Anomalies seen in Cdo(-/-) mice include coloboma (failure to close the optic fissure); failure to form a proper boundary between the retinal pigmented epithelium and optic stalk; defective lens formation, including failure to separate from the surface ectoderm; and microphthalmia. Consistent with this wide array of defects, developing eyes of Cdo(-/-) mice show altered expression of several regulators of dorsoventral eye patterning, including Pax6, Pax2, and Tbx5. Taken together, these findings show that Cdo is required for normal eye development and is required for normal expression of patterning genes in both the ventral and dorsal domains. The multiple eye development defects seen in Cdo(-/-) mice suggest that mutations in human Cdo could contribute to congenital eye anomalies, such as Jacobsen syndrome, which is frequently associated with ocular defects, including coloboma and Peters' anomaly.