The coordination of proliferation and cell fate specification is of particular importance in the developing central nervous system, because different classes of neurons are generated at different stages of development. As a consequence, if too many or too few multipotent progenitor cells exit the cell cycle during the early stages of development, then a predictable shift in the ratio of neuronal cell types would occur. Such a perturbation could prove devastating for normal neural function. In the past several years, we have made numerous advances toward understanding the roles of cell cycle proteins in the development of the retina, a specialized region of the central nervous system. More recently, researchers have identified and characterized a number of homeodomain transcription factors that regulate the proliferation of retinal progenitor cells and the specification of cell fate. In this review, I will present recent findings about the homeodomain protein Prox1 and compare them with studies of two other homeodomain proteins that are important regulators of retinal development, Chx10 and Six3. Together, the research on the genes that encode these three proteins raises several new questions about the mechanisms underlying the coordination of proliferation and cell fate specification in the developing central nervous system.