Abstract In the retina, Müller glia have the potential to become progenitor cells with the ability to proliferate and regenerate neurons. However, the ability of Müller glia-derived progenitor cells (MGPCs) to proliferate and produce neurons is limited in higher vertebrates. Using the chick model system, we investigate how retinoic acid (RA)-signaling influences the proliferation and the formation of MGPCs. We observed an upregulation of cellular RA binding proteins (CRABP) in the Müller glia of damaged retinas where the formation of MGPCs is known to occur. Activation of RA-signaling was stimulated, whereas inhibition suppressed the proliferation of MGPCs in damaged retinas and in fibroblast growth factor 2-treated undamaged retinas. Furthermore, inhibition of RA-degradation stimulated the proliferation of MGPCs. Levels of Pax6, Klf4, and cFos were upregulated in MGPCs by RA agonists and downregulated in MGPCs by RA antagonists. Activation of RA-signaling following MGPC proliferation increased the percentage of progeny that differentiated as neurons. Similarly, the combination of RA and insulin-like growth factor 1 (IGF1) significantly increased neurogenesis from retinal progenitors in the circumferential marginal zone (CMZ). In summary, RA-signaling stimulates the formation of proliferating MGPCs and enhances the neurogenic potential of MGPCs and stem cells in the CMZ.