A study of the development of the eye in the cinnamon mouse, homozygous for the gene for microphthalmia (mi), has shown that the microphthalmia is due to failure of secondary vitreous formation associated with a coloboma. The retina is dystrophic but there is a residual population of large ganglion cells and the optic nerve also contains ganglion cells. All these ganglion cells have cytoplasm similar to the retinal ganglion cells in the normal controls. It is postulated that they communicate with axons in the optic nerve. In addition, the outer epithelial layer of the eye cup, which normally becomes pigmented, forms retinal tissue in the homozygous mouse and this is also true of the dorsal part of the eyestalk near the eye.