A new mutant rat with small eyes (rSey) which was found in the course of breeding Sprague-Dawley rats is described. Genetic analysis demonstrates that rSey is inherited as an autosomal dominant mutation. Heterozygotes (rSey/+) have small eyes, while homozygotes (rSey/rSey) do not develop lens and nasal placodes, resulting in lack of eyes and the nose and perinatal death. rSey does not affect any other cranial regions including the maxilla, mandible, hyoid arch and otic vesicles. The genetics and phenotype of the mutant rat closely resemble the Sey mutation in the mouse, suggesting that rSey is the rat counterpart of the Sey mouse. Tissue recombination studies indicate that ectoderm from homozygotes (rSey/rSey) never differentiates into lens tissue even if it is cultured with normal optic vesicles from rSey/+ or +/+ embryos. In contrast, lens differentiation occurs when ectoderm from rSey/+ or +/+ as well as rSey/rSey embryos. These results suggest that the failure of head ectoderm from rSey/rSey embryos to differentiate into lens results from defects in the early differentiation signaling from the neural plate or underlying mesenchyme before the optic vesicle grows out to contact the head ectoderm.