Neural crest (NC) contributes to various structures of the eye including cornea, ciliary body and retina. The association of NC-derived cells with hyaloid vessels in the form of pericytes is established. Similarly, persistence of NC-derived cells in the inner retina layer of the mature retina has been suggested. To date, no specific function has been attributed to them. NC-derived Bone morphogenetic protein 7 (BMP7) controls neurogenic properties in the brain and regulates glia differentiation. Here, we assessed the role of NC-derived BMP7 in the adult retina.BMP7 expression was determined using Bmp7LacZ reporter mice. BMP7 was expressed in GCL, IPL, OPL, and photoreceptors in P0, P14 and P30 retinas. Lineage tracing confirmed the presence of NC-derived cells in the GCL, INL, and ONL. Some but not all cells associated with vasculature. To test the function of NC-derived Bmp7, Bmp7fl/flWnt1cre (Bmp7ncko) mice were assessed by histological and functional methods. Loss of NC-derived cells in the GCL and INL and mild structural abnormalities were observed in the Bmp7ncko retina. Electroretinography revealed reduced a wave under photopic conditions and b wave under both scotopic and photopic conditions. The neuronal circuitry in the inner retina appeared affected, evidenced by decreased Calbindin in the GCL, IPL and INL. In the outer retina, S-opsin was increased. BMP7 expression in the mutant retina was strongly decreased at birth, but increased expression from cells other than NC was observed in the adult retina. This was associated with an increase in IBA1, suggestive that loss of NC-derived BMP7 predisposes to development of gliosis-like changes in the adult retina. Overall, our data reveal an important contribution of NC-derived BMP7 for the development and function of the inner and outer retina.