The relation between terminal mitosis and the events that determine the developmental fate of embryonic precursor cells is not well understood. This relation has now been investigated with [3H]thymidine autoradiography to determine the time of cell birth and with a culture system that allows the testing of the developmental potential of cells isolated from the chick embryo retina. Contrary to the situation in vivo, where neuronal differentiation always precedes photoreceptor differentiation, photoreceptor differentiation occurs prematurely and precedes neuronal differentiation when precursor cells are isolated from the retina at early embryonic stages. Thus, cells born by embryonic day 5 (ED-5) give rise predominantly to photoreceptors when isolated for culture on ED-6 but develop mainly as neurons when isolated on ED-8. This suggests that retinal precursor cells retain after terminal mitosis the capacity to develop either as neurons or as photoreceptors. Moreover, photoreceptor differentiation appears to represent a constitutive or "default" pathway that precursor cells follow in the absence of neuron-inducing signals.