A photoreceptor cell line, designated 661W, was tested for its response to growth factors secreted by retinal pigment epithelial cells including basic fibroblast growth factor, epidermal growth factor, and nerve growth factor. Early passaged 661W cells expressed high levels of retinal progenitor markers such as nestin and Pax6, but not opsin or glial fibrillary acidic protein. 661W cells grown in FGF-2 or EGF exhibited a multiple-process morphology with small phase-bright nuclei similar to neurons, whereas cells cultured in nerve growth factor (NGF) or retinal pigment epithelium (RPE)-conditioned medium (RPE-CM) displayed rounded profiles lacking processes. 661W cells grown in FGF-2 were slightly elevated, but not significantly above, control cultures; but cells treated with RPE-CM or NGF were fewer, approximately 63% and 49% of control, respectively. NGF immunodepletion of RPE-CM strongly suppressed the inhibitory activity of RPE-CM on cell proliferation. Cells treated with FGF-2, but not NGF, upregulated their expression of opsin. All treatment conditions resulted in almost 100% viability based on calcium AM staining. Cells grown on extracellular matrix proteins laminin, fibronectin, and/or collagen resembled those grown on untreated dishes. This study showed that early passaged 661W cells displayed characteristics of retinal progenitor cells. The 661W cells proliferated and appeared to mature morphologically expressing rod photoreceptor phenotype in response to FGF-2. In contrast, NGF and RPE-CM inhibited proliferation and morphological differentiation of 661W cells, possibly inducing cell cycle arrest. These findings are consistent with reports that the RPE modulates photoreceptor differentiation and retinal progenitor cells via secreted factors and may play a role in the regulation of the retinal stem cell niche.