The retinal pigment epithelium (RPE) is a monolayer that separates the outer surface of the neural retina from the choriocapillaris. Because the choriocapillaris is fenestrated, it is the RPE that forms the outer blood-retinal barrier and regulates the environment of the outer retina. Like all epithelia and endothelia, the ability of RPE to regulate transepithelial transport depends upon two properties: apical tight junctions to retard diffusion through the paracellular spaces of the monolayer, and an asymmetric distribution of proteins to regulate vectorial transport across the monolayer. During development, these properties form gradually. Initially, the tight junctions are leaky, and the RPE exhibits only partial polarity. As the neural retina and choriocapillaris develop, there are progressive changes in the composition of the apical junctional complexes, the expression of cell adhesion proteins, and the distribution of membrane and cytoskeletal proteins. Development can be used to dissect the multiple mechanisms that establish and maintain polarity and barrier function. These mechanisms are regulated by the interactions that develop between the RPE and its neighboring tissues. This review discusses the remodeling of the apical, lateral and basal plasma membranes of RPE that occurs during normal development, and establishes a framework to integrate the data obtained from multiple species. It examines the progress in understanding how environmental interactions regulate this development.