The retinal homeodomain protein CHX10 is required for murine eye development, since Chx1O-/- mice are microphthalmic. To determine whether CHX10 mutations cause human eye defects, we cloned the human gene and screened patients with ocular anomalies for mutations. In two microphthalmic subjects we identified R200Q and R200P substitutions. Since R200 contacts the PO4 backbone, the predicted severe loss of function of these alleles was established by identifying CHX10 DNA binding sites and showing, in EMSA studies, that neither mutant bound the CHX10 DNA target. To ascertain how loss of CHX10 function causes microphthalmia, we compared the expression of CHX10 candidate target genes in control vs. Chx10-/- mice. Unexpectedly, we found that the Miff transcription factor gene is ectopically expressed in neuroretina of Chx10-/- mice. To determine whether Miff is required for Chx10-/- microphthalmia, we generated Mitfmi/mi; Chx10-/- double mutants, which had dramatic rescue of the Chx10-/- phenotype; eye size at P0 was largely normalized. To further define the role of the CHX10 gene in development, we have cloned homologues in mice and Drosophila melanogaster, and defined a role for Chx10 in regulating the abundance of retinal stem cells in the adult mammalian eye.