Synchronized spontaneous rhythmic activity is a feature common to many parts of the developing nervous system. In the early visual system, before vision, developing circuits in the retina generate synchronized patterns of bursting activity that contain information useful for patterning connections between retinal ganglion cells and their central targets. However, how developing retinal circuits generate and regulate these spontaneous activity patterns is still incompletely understood. Here we show that in developing retinal circuits, the nature of excitatory neurotransmission driving correlated bursting activity in ganglion cells is not fixed but undergoes a developmental shift from cholinergic to glutamatergic transmission. In addition, we show that this shift occurs as presynaptic glutamatergic bipolar cells form functional connections onto the ganglion cells, implicating the role of bipolar cells in providing endogenous drive to bursting activity later in development. This transition coincides with the period when subsets of ganglion cells (On and Off cells) develop distinct activity patterns that are thought to underlie the refinement of their connectivity with their central targets. Here, our results suggest that the differences in activity patterns of On and Off ganglion cells may be conferred by differential synaptic drive from On and Off bipolar cells, respectively. Taken together, our results suggest that the regulation of patterned spontaneous activity by neurotransmitters undergoes systematic change as new cellular elements are added to developing circuits and also that these new elements can help specify distinct activity patterns appropriate for shaping connectivity patterns at later ages.