The Bmp family of secreted signaling molecules is implicated in multiple aspects of embryonic development. However, the cell-type-specific requirements for this signaling pathway are often obscure in the context of complex embryonic tissue interactions. To define the cell-autonomous requirements for Bmp signaling, we have used a Cre-loxP strategy to delete Bmp receptor function specifically within the developing mouse retina. Disruption of a Bmp type I receptor gene, Bmpr1a, leads to no detectable eye abnormality. Further reduction of Bmp receptor activity by removing one functional copy of another Bmp type I receptor gene, Bmpr1b, in the retina-specific Bmpr1a mutant background, results in abnormal retinal dorsoventral patterning. Double mutants completely lacking both of these genes exhibit severe eye defects characterized by reduced growth of embryonic retina and failure of retinal neurogenesis. These studies provide direct genetic evidence that Bmpr1a and Bmpr1b play redundant roles during retinal development, and that different threshold levels of Bmp signaling regulate distinct developmental programs such as patterning, growth and differentiation of the retina.