During eye development in the axolotl (Ambystoma mexicanum Shaw), morphogenetic movements bring together tissues from head epidermis, neuroectoderm and neural crest. The stages 0 to 14 of axolotl eye development were expanded from Rabl's (1898) stages 1 to 10 and correlated with Harrison's (1969) stages. At the onset of neurulation (stage 13 of Harrison), the head epidermis is already determined to form skin, and the neuroectoderm is committed to form brain, because these tissues develop autonomously in 60% Leibovitz L-15 culture medium. However, a sequence of mutual tissue interactions is necessary to stimulate eye development. When head epidermis and neuroectoderm were cocultured, eyes developed, containing retinas with photoreceptors (stage 8) and lenses with secondary lens fibres (stage 8). The first event needed in this case appears to be the secretion of a growth factor from the head epidermis which stimulates retina development from the neuroectoderm. When neuroectoderm cultures were exposed to nondialysable extracts (30 micrograms ml-1) of an adult epidermis derivative, the bovine cornea, pigmented retinas (stage 6) and at higher concentrations (3000 micrograms ml-1) neural retinas developed (stage 6). In turn, lens formation is stimulated in the head epidermis by a retina-derived growth factor. A mutation that causes adult eyelessness (e eyeless, nonlethal, recessive) affects the earliest event in eye development (stage 1a), while a mutation that causes arrest of eye development (mi microphthalmic, lethal, recessive) acts in a later event (stage 8). Two possibilities have been considered in the case of mutation e: either the head epidermis does not secrete sufficient amounts of active growth factor, or the presumptive retina itself is defective. The latter statement turned out to be correct, because mutant e neural plates rarely developed early retina stages (stage 5) in organ culture when combined with wild-type head epidermis. On the other hand, wild-type neural plates formed advanced retinas (stage 8) in all cases when combined with mutant e head epidermis. As expected, no retina or lens developed when both neural plate and head epidermis were from mutant e donors. The heterozygous presence of genes e and r (renal insufficiency, lethal, recessive) produces duplications of the presumptive retina at the optic stalk. This observation is consistent with the notion that the mutation e, assisted by the r locus, causes a primary failure in the presumptive retinal region.