Regeneration of the retina in amphibians is initiated by the transdifferentiation of the retinal pigmented epithelium (RPE) into neural progenitors. A similar process occurs in the early embryonic chick, but the RPE soon loses this ability. The factors that limit the competence of RPE cells to regenerate neural retina are not understood; however, factors normally involved in the development of the eye (i.e. FGF and Pax6) have also been implicated in transdifferentiation. Therefore, we tested whether activin, a TGFbeta family signaling protein shown to be important in RPE development, contributes to the loss in competence of the RPE to regenerate retina. We have found that addition of activin blocks regeneration from the RPE, even during stages when the cells are competent. Conversely, a small molecule inhibitor of the activin/TGFbeta/nodal receptors can delay, and even reverse, the developmental restriction in FGF-stimulated neural retinal regeneration.