Mutation of the zebrafish lakritz (lak) locus completely eliminates the earliest-born retinal cells, the ganglion cells (RGCs). Instead, excess amacrine, bipolar, and Müller glial cells are generated in the mutant. The extra amacrines are found at ectopic locations in the ganglion cell layer. Cone photoreceptors appear unaffected by the mutation. Molecular analysis reveals that lak encodes Ath5, the zebrafish eye-specific ortholog of the Drosophila basic helix-loop-helix transcription factor Atonal. A combined birth-dating and cell marker analysis demonstrates that lak/ath5 is essential for RGC determination during the first wave of neurogenesis in the retina. Our results suggest that this wave is skipped in the mutant, leading to an accumulation of progenitors for inner nuclear layer cells.