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A study of the morphogenesis of the grenadier anchovy retina was undertaken using light and electron microscopy. Five developmental stages from prelarvae 3 days after fertilization to adult fish were studied. In addition to the general morphology of the eye and retina, special emphasis was given to the development of the photoreceptors and pigment epithelium (PE). The earliest retinae showing structural features indicative of a functioning eye are pure cone retinae composed of rows of alternating long and short cones forming a transient, tesselated pattern. At this stage there is a conventional PE containing melanin. In older stages cone rows are separated by the newly formed rods and by PE wedges filled with diffusely reflecting guanine crystallites. The findings are compared with the retinae of other engraulidids and with the development of teleost retinae in general. Moreover, the observed structural changes are discussed with respect to the photic habitat conditions of these anadromous fish that move between coastal waters, estuary, and river.