Horizontal cells are inhibitory interneurons with laterally oriented dendrites that overlap one another, contacting the pedicles of cone photoreceptors. Because of their regular spacing, the network of horizontal cells provides a uniform coverage of the retinal surface. The developmental processes establishing these network properties are undefined, but cell-intrinsic instructions and interactions with other cells have each been suggested to play a role. Here, we show that the intercellular spacing of horizontal cells is essentially independent of genetic background and is predicted by local density, suggesting that horizontal cell positioning is modulated by proximity to other horizontal cells. Dendritic field area compensates for this variation in intercellular spacing, maintaining constant dendritic coverage between strains. Functional dendritic overlap is achieved anatomically at the level of the pedicles, where horizontal cells interact with one another to establish their connectivity: the number of dendritic terminals contacting a pedicle changes, reciprocally, between neighboring horizontal cells during development based on their relative proximity to each pedicle. Cellular morphology is also shown to be regulated by the afferents themselves: afferent elimination before innervation does not alter dendritic field size nor stratification but compromises dendritic branching and prevents terminal formation. Afferent and homotypic interactions therefore generate the morphology, spacing, and connectivity of horizontal cells underlying their functional coverage of the retina.