Retinoblastoma (Rb) is a childhood cancer of the developing retina, accounting for up to 17% of all tumors in infancy. To gain insights into the transcriptional events of cell state transitions during Rb development, we established 2 disease models via retinal organoid differentiation of a pRB (retinoblastoma protein)-depleted human embryonic stem cell line (RB1-null hESCs) and a pRB patient-specific induced pluripotent (iPSC) line harboring a RB1 biallelic mutation (c.2082delC). Both models were characterized by pRB depletion and accumulation of retinal progenitor cells at the expense of amacrine, horizontal and retinal ganglion cells, which suggests an important role for pRB in differentiation of these cell lineages. Importantly, a significant increase in the fraction of proliferating cone precursors (RXRγ+Ki67+) was observed in both pRB-depleted organoid models, which were defined as Rb-like clusters by single-cell RNA-Seq analysis. The pRB-depleted retinal organoids displayed similar features to Rb tumors, including mitochondrial cristae aberrations and rosette-like structures, and were able to undergo cell growth in an anchorage-independent manner, indicative of cell transformation in vitro. In both models, the Rb cones expressed retinal ganglion and horizontal cell markers, a novel finding, which could help to better characterize these tumors with possible therapeutic implications. Application of Melphalan, Topotecan, and TW-37 led to a significant reduction in the fraction of Rb proliferating cone precursors, validating the suitability of these in vitro models for testing novel therapeutics for Rb.