Determination of the dorso-ventral dimension of the vertebrate retina is known to involve retinoic acid (RA), in that high RA activates expression of a ventral retinaldehyde dehydrogenase and low RA of a dorsal dehydrogenase. Here we show that in the early eye vesicle of the mouse embryo, expression of the dorsal dehydrogenase is preceded by, and transiently overlaps with, the RA-degrading oxidase creating a trough between very high ventral and moderately high dorsal RA levels. Most of the RA receptors are expressed uniformly throughout the retina except for the RA-sensitive RARbeta, which is down-regulated in the CYP26 stripe. The orphan receptor COUP-TFII, which modulates RA responses, colocalizes with the dorsal dehydrogenase. The organization of the embryonic vertebrate retina into dorsal ventral territories divided by a horizontal boundary has parallels to the division of the Drosophila eye disc into dorsal, equatorial and ventral zones, indicating that the similarities in eye morphogenesis extend beyond single molecules to topographical patterns.