Neurotransmitter receptors are central to communication at synapses. Many components of the machinery for neurotransmission are present prior to synapse formation, suggesting a developmental role. Here, evidence is presented that signaling through glycine receptor alpha2 (GlyRalpha2) and GABA(A) receptors plays a role in photoreceptor development in the vertebrate retina. The signaling is likely mediated by taurine, which is present at high levels throughout the developing central nervous system (CNS). Taurine potentiates the production of rod photoreceptors, and this induction is inhibited by strychnine, an antagonist of glycine receptors, and bicuculline, an antagonist of GABA receptors. Gain-of-function experiments showed that signaling through GlyRalpha2 induced exit from mitosis and an increase in rod photoreceptors. Furthermore, targeted knockdown of GlyRalpha2 decreased the number of photoreceptors while increasing the number of other retinal cell types. These data support a previously undescribed role for these ligand-gated ion channels during the early stages of CNS development.