The first cells generated during development of the vertebrate retina are the ganglion cells, the projection neurons of the retina. Although they are one of the most intensively studied cell types within the central nervous system, little is known of the mechanisms that determine ganglion cell fate. We demonstrate that ganglion cells are selected from a large group of competent progenitors that comprise the majority of the early embryonic retina and that differentiation within this group is regulated by Notch. Notch activity in vivo was diminished using antisense oligonucleotides or augmented using a retrovirally transduced constitutively active allele of Notch. The number of ganglion cells produced was inversely related to the level of Notch activity. In addition, the Notch ligand Delta inhibited retinal progenitors from differentiating as ganglion cells to the same degree as did activated Notch in an in vitro assay. These results suggest a conserved strategy for neurogenesis in the retina and describe a versatile in vitro and in vivo system with which to examine the action of the Notch pathway in a specific cell fate decision in a vertebrate.