Retina differentiation involves the acquisition of a precise layered arrangement, with RPE cells in the first layer in intimate contact with photoreceptors in the second layer. Here, we developed an in vitro coculture model, to test the hypothesis that RPE cells play a pivotal role in organizing the spatial structure of the retina. We cocultured rat retinal neurons with ARPE-19 epithelial cells under various experimental conditions. Strikingly, when seeded over RPE cells, photoreceptors attached to their apical surfaces and proceeded with their development, including the increased synthesis of rhodopsin. Conversely, when we seeded RPE cells over neurons, the RPE cells rapidly detached photoreceptors from their substrata and positioned themselves underneath, thus restoring the normal in vivo arrangement. Treatment with the metalloproteinase inhibitor TIMP-1 blocked this reorganization, suggesting the involvement of metalloproteinases in this process. Reorganization was highly selective for photoreceptors because 98% of photoreceptors but very few amacrine neurons were found to redistribute on top of RPE cells. Interestingly, RPE cells were much more efficient than other epithelial or nonepithelial cells in promoting this reorganization. RPE cells also promoted the growth of photoreceptor axons away from them. An additional factor that contributed to the distal arrangement of photoreceptor axons was the migration of photoreceptor cell bodies along their own neurites toward the RPE cells. Our results demonstrate that RPE and photoreceptor cells interact in vitro in very specific ways. They also show that in vitro studies may provide important insights into the process of pattern formation in the retina.