Tlx belongs to a class of orphan nuclear receptors that underlies many aspects of neural development in the CNS. However, the fundamental roles played by Tlx in the control of eye developmental programs remain elusive. By using Tlx knock-out (KO) mice, we show here that Tlx is expressed by retinal progenitor cells in the neuroblastic layer during the period of retinal layer formation, and it is critical for controlling the generation of appropriate numbers of retinal progenies through the activities of cell cycle-related molecules, cyclin D1 and p27^Kip1. Tlx expression is restricted to Müller cells in the mature retina and appears to control their proper development. Furthermore, we show that Tlx is expressed by immature astrocytes that migrate from the optic nerve onto the inner surface of the retina and is required for their generation and maturation, as assessed by honeycomb network formation and expression of R-cadherin, a critical component for vasculogenesis. The impaired astrocyte network formation on the inner retinal surface is accompanied by the loss of vasculogenesis in Tlx KO retinas. Our studies thus indicate that Tlx underlies a fundamental developmental program of retinal organization and controls the generation of the proper numbers of retinal progenies and development of glial cells during the protracted period of retinogenesis.