Human pluripotent stem cells (hPSCs) have the potential to differentiate along the retinal lineage. However, most induction systems are dependent on multiple small molecular compounds such as Dkk-1, Lefty-A, and retinoic acid. In the present study, we efficiently differentiated hPSCs into retinal cells using a retinal differentiation medium (RDM) without the use of small molecular compounds. This novel differentiation system recapitulates retinal morphogenesis in humans, i.e. hPSCs gradually differentiate into optic vesicle-shaped spheres, followed by optic cup-shaped spheres and, lastly, retinal progenitor cells. Furthermore, at different stages, hPSC-derived retinal cells mirror the transcription factor expression profiles seen in their counterparts during human embryogenesis. Most importantly, hinge epithelium was found between the hPSC-derived neural retina (NR) and retinal pigment epithelium (RPE). These data suggest that our culture system provides a new method for generating hPSC-derived retinal cells that, for the first time, might be used in human transplantation.