During retina development, retinal progenitor cell (RPC) proliferation and differentiation are regulated by complex inter- and intracellular interactions. Bone marrow mesenchymal stem cells (BMSCs) are reported to express a variety of cytokines and neurotrophic factors, which have powerful trophic and protective functions for neural tissue-derived cells. Here, we show that the expanded RPC cultures treated with BMSC-derived conditioned medium (CM) which was substantially enriched for bFGF and CNTF, expressed clearly increased levels of nuclear receptor TLX, an essential regulator of neural stem cell (NSC) self-renewal, as well as betacellulin (BTC), an EGF-like protein described as supporting NSC expansion. The BMSC CM- or bFGF-treated RPCs also displayed an obviously enhanced proliferation capability, while BMSC CM-derived bFGF knocked down by anti-bFGF, the effect of BMSC CM on enhancing RPC proliferation was partly reversed. Under differentiation conditions, treatment with BMSC CM or CNTF markedly favoured RPC differentiation towards retinal neurons, including Brn3a-positive retinal ganglion cells (RGCs) and rhodopsin-positive photoreceptors, and clearly diminished retinal glial cell differentiation. These findings demonstrate that BMSCs supported RPC proliferation and neuronal differentiation which may be partly mediated by BMSC CM-derived bFGF and CNTF, reveal potential limitations of RPC culture systems, and suggest a means for optimizing RPC cell fate determination in vitro.