Hemizygosity for the retinoblastoma gene RB in man strongly predisposes to retinoblastoma. In the mouse, however, Rb hemizygosity leaves the retina normal, whereas in Rb-/- chimeras pRb-deficient retinoblasts undergo apoptosis. To test whether concomitant inactivation of the Rb-related gene p107 is required to unleash the oncogenic potential of pRb deficiency in the mouse retina, we inactivated both Rb and p107 by homologous recombination in embryonic stem cells and generated chimeric mice. Retinoblastomas were found in five out of seven adult pRb/p107-deficient chimeras. The retinal tumors showed amacrine cell differentiation, and therefore originated from cells committed to the inner but not the outer nuclear layer. Retinal lesions were already observed at embryonic day 17.5. At this stage, the primitive nuclear layer exhibited severe dysplasia, including rosette-like arrangements, and apoptosis. These findings provide formal proof for the role of loss of Rb in retinoblastoma development in the mouse and the first in vivo evidence that p107 can exert a tumor suppressor function.