Retinal degeneration resulting in the loss of photoreceptors is the leading cause of blindness. Several therapeutic protocols are under consideration for treatment of this disease. Tissue replacement is one such strategy currently being explored. However, availability of tissues for transplant poses a major obstacle. Another strategy with great potential is the use of adult stem cells, which could be expanded in culture and then utilized to engineer retinal tissue. In this study, we have explored a spontaneously immortalized human retinal progenitor cell line for its potential in retinal engineering using rotary cultures to generate three-dimensional (3D) structures. Retinal progenitors cultured alone or cocultured with retinal pigment epithelial cells form aggregates. The aggregate size increases between days 1 and 10. The cells grown as a 3D culture rotary system, which promotes cell-cell interaction, retain a spectrum of differentiation capability. Photoreceptor differentiation in these cultures is confirmed by significant upregulation of rhodopsin and AaNat, an enzyme implicated in melatonin synthesis (immunohistochemistry and Western blot analysis). Photoreceptor induction and differentiation is further attested to by the upregulation of rod transcription factor Nrl, Nr(2)e(3), expression of interstitial retinal binding protein, and rhodopsin kinase by reverse transcription-polymerase chain reaction. Differentiation toward other cell lineages is confirmed by the expression of tyrosine hydroxylase in amacrine cells, thy 1.1 expression in ganglion cells and calbindin, and GNB3 expression in cone cells. The capability of retinal progenitors to give rise to several retinal cell types when grown as aggregated cells in rotary culture offers hope that progenitor stem cells under appropriate culture conditions will be valuable to engineer retinal constructs, which could be further tested for their transplant potential. The fidelity with which this multipotential cell line retains its capacity to differentiate into multiple cell types holds great promise for the use of tissue-specific adult stem cells for therapy.