The maintenance and differentiation of retinal progenitors take place in the context of the microenvironment in which they reside at a given time during retinal histogenesis. To understand the nature of the microenvironment in the developing retina, we have examined the influence of activities present during the early stage of retinal histogenesis on enriched retinal progenitors, using the neurosphere model. Early and late retinal progenitors, enriched as neurospheres from embryonic day 14 (E14) and E18 rat retina, respectively, were cultured in embryonic day 3 (E3) chick retinal conditioned medium, simulating the microenvironment present during early retinal histogenesis. Examination of the differentiation and proliferation of retinal progenitors revealed that the early microenvironment contains at least three regulatory activities, which are partitioned in different size fractions of the conditioned medium with different heat sensitivity. First, it is characterized by activities, present in heat stable 30 kDa fraction, that regulate the number of early born neurons and maintain the pool of retinal progenitors. Third, it possesses activities, present in heat-sensitive <30 kDa fraction, that prevent the premature differentiation of early retinal progenitors into the late born neurons. Thus, our observations demonstrate the regulatory influence of microenvironment on the maintenance and differentiation of retinal progenitors and establish neurospheres as a viable model system for the examination of such influences.