During vertebrate embryogenesis, the neuroectoderm differentiates into neural tissues and also into non-neural tissues such as the choroid plexus in the brain and the retinal pigment epithelium in the eye. The molecular mechanisms that pattern neural and non-neural tissues within the neuroectoderm remain unknown. We report that FGF9 is normally expressed in the distal region of the optic vesicle that is destined to become the neural retina, suggesting a role in neural patterning in the optic neuroepithelium. Ectopic expression of FGF9 in the proximal region of the optic vesicle extends neural differentiation into the presumptive retinal pigment epithelium, resulting in a duplicate neural retina in transgenic mice. Ectopic expression of constitutively active Ras is also sufficient to convert the retinal pigment epithelium to neural retina, suggesting that Ras-mediated signaling may be involved in neural differentiation in the immature optic vesicle. The original and the duplicate neural retinae differentiate and laminate with mirror-image polarity in the absence of an RPE, suggesting that the program of neuronal differentiation in the retina is autonomously regulated. In mouse embryos lacking FGF9, the retinal pigment epithelium extends into the presumptive neural retina, indicating a role of FGF9 in defining the boundary of the neural retina.