An important step in retinal development is the positioning of progenitors within the eye field where they receive the local environmental signals that will direct their ultimate fate. Recent evidence indicates that ephrinB1 functions in retinal progenitor movement, but the signalling pathway is unclear. We present evidence that ephrinB1 signals through its intracellular domain to control retinal progenitor movement into the eye field by interacting with Xenopus Dishevelled (Xdsh), and by using the planar cell polarity (PCP) pathway. Blocking Xdsh translation prevents retinal progeny from entering the eye field, similarly to the morpholino-mediated loss of ephrinB1 (ref. 2). Overexpression of Xdsh can rescue the phenotype induced by loss of ephrinB1, and this rescue (as well as a physical association between Xdsh and ephrinB1) is completely dependent on the DEP (Dishevelled, Egl-10, Pleckstrin) domain of Xdsh. Similar gain- and loss-of-function experiments suggest that Xdsh associates with ephrinB1 and mediates ephrinB1 signalling through downstream members of the PCP pathway during eye field formation.