Photoreceptors are the most abundant cell type in the vertebrate neural retina. Like the other retinal neurons and the Müller glia, they arise from a population of precursor cells that are multipotent and intrinsic to the retina. Approximately 10 years ago, several studies demonstrated that retinal precursor cells (RPCs) are competent to respond to environmental factors that promote cell type determination and differentiation. Since those studies, significant effort has been directed at identifying the molecular nature of these environmental signals and understanding the precise mechanisms they employ to drive RPCs towards the different retinal fates. In this review, we describe the recent progress toward understanding how environmental factors influence the development of vertebrate rod photoreceptors.