Molecular analysis of vertebrate eye development has been hampered by the availability of sequences that can selectively direct gene expression in the developing eye. We report the characterization of the regulatory sequences of the Xenopus laevis Rx1A gene that can direct gene expression in the retinal progenitor cells. We have used these sequences to investigate the role of Fibroblast Growth Factor (FGF) signaling in the development of retinal cell types. FGFs are signaling molecules that are crucial for correct patterning of the embryo and that play important roles in the development of several embryonic tissues. FGFs and their receptors are expressed in the developing retina, and FGF receptor-mediated signaling has been implicated to have a role in the specification and survival of retinal cell types. We investigated the role of FGF signaling mediated by FGF receptor 4a in the development of retinal cell types in Xenopus laevis. For this purpose, we have made transgenic Xenopus tadpoles in which the dominant-negative FGFR4a(ΔFGFR4a) coding region was linked to the newly characterized regulatory sequences of the Xrx1A gene. We found that the expression ofΔFGFR4a in retinal progenitor cells results in abnormal retinal development. The retinas of transgenic animals expressing ΔFGFR4a show disorganized cell layering and specifically lack photoreceptor cells. These experiments show that FGFR4a-mediated FGF signaling is necessary for the correct specification of retinal cell types. Furthermore, they demonstrate that constructs using Xrx1A regulatory sequences are excellent tools with which to study the developmental processes involved in retinal formation.