There is increasing, although largely indirect, evidence that neurotrophic factors not only function as target-derived survival factors for projection neurons, but also act locally to regulate developmental processes. We studied the expression of ciliary neurotrophic factor (CNTF) and the CNTF-specific ligand-binding alpha-subunit of the CNTF receptor complex (CNTFR alpha) in the rat retina, a well-defined CNS model system, and CNTF effects on cultured retinal neurons. Both CNTF and CNTFR alpha (mRNA and protein) are expressed during phases of retinal neurogenesis and differentiation. Retina-specific Müller glia are immunocytochemically identified as the site of CNTF production and CNTFR alpha-expressing, distinct neuronal cell types as potential CNTF targets. Biological effects on corresponding neurons in culture further support the conclusion that locally supplied CNTF plays a regulatory role in the development of various retinal cell types including ganglion cells and interneurons.