Retinoblastoma clinical observations revealed the role of tumor suppressor genes in human cancer, Knudson's 'two-hit' model of cancer induction. We now demonstrate that loss of both RB1 tumor suppressor gene alleles initiates quiescent RB1(-/-) retinomas with low level genomic instability and high expression of the senescence-associated proteins p16(INK4a) and p130. Although retinomas can remain unchanged throughout life, highly proliferative, clonal and aneuploid retinoblastomas commonly emerge, exhibiting altered gene copy number and expression of oncogenes (MYCN, E2F3, DEK, KIF14 and MDM4) and tumor suppressor genes (CDH11, p75(NTR)) and reduced expression of p16(INK4a) and p130. We suggest that RB1 inactivation in developing retina induces genomic instability, but senescence can block transformation at the stage of retinoma. However, stable retinoma is rarely clinically observed because progressive genomic instability commonly leads to highly proliferative retinoblastoma.