The mechanisms by which multipotent progenitor cells are directed to alternative cell identities during the histogenesis of the vertebrate central nervous system are likely to involve several different types of signaling systems. Recent evidence indicates that 9-cis retinoic acid, which acts through members of the steroid/thyroid superfamily of receptors, directs progenitor cells to the rod photoreceptor cell fate. We now report that another effector of this family of receptors, thyroid hormone, induces an increase in the number of cone photoreceptors that develop in embryonic rat retinal cultures, and that combinations of 9-cis retinoic acid and triiodothyronine cause isolated progenitor cells to differentiate as either rods or cones, depending on the relative concentrations of the ligands. These results implicate thyroid hormone in CNS cell fate determination, and suggest that different photoreceptor phenotypes may be modulated through the formation of thyroid/retinoid receptor heterodimers.