Previous in vitro studies have convincingly demonstrated the involvement of diffusible factors in the regulation of photoreceptor development. We now provide evidence that ciliary neurotrophic factor (CNTF) represents one of these regulatory molecules. In low density monolayer cultures prepared from embryonic day 8 chick retina, photoreceptor development was studied using the monoclonal antiopsin antibody rho-4D2 as a differentiation marker. The number of cells acquiring opsin immunoreactivity, determined after 3 days in vitro, was increased up to 4-fold in the presence of CNTF to maximally 10.5% of all cells. Basic fibroblast growth factor or taurine both of which have been reported to stimulate opsin expression in rat retinal cultures and other neurotrophic factors tested (nerve growth factor, brain derived neurotrophic factor) had no effect. The EC50 of the CNTF effect (2.6 pM) was virtually identical to that measured for other CNTF receptor mediated cellular responses. Conditioned medium produced by cultured retinal cells (most likely glial cells) exhibited opsin stimulating activity identical to that of CNTF. Stimulation of opsin expression was specific for morphologically less mature photoreceptors and obviously restricted to rods, since changes in the number of identifiable cone photoreceptors expressing opsin immunoreactivity (10% of all cones) were not detectable. Measurement of the kinetics of the CNTF response revealed that the factor acted on immature opsin-negative progenitors and that CNTF effects were unlikely to reflect enhanced cell survival. Proliferation of photoreceptors was also unaffected, as demonstrated by [3H]thymidine autoradiography. With prolonged culture periods a gradual decrease in the number of opsin-positive cells was observed both in controls and in the continuous presence of CNTF. This decrease could be partly prevented by the addition of 1 mM taurine. Our results suggest that CNTF acted as an inductive signal for uncommitted progenitor cells or during early stages of rod photoreceptor differentiation, whereas other extrinsic stimulatory activities seemed to be required for further maturation.