Embryonic stem cells have the potential to give rise to all cell lineages when introduced into the early embryo. They also give rise to a limited number of different cell types in vitro in specialized culture systems. In this study, we established a culture system in which a structure consisting of lens, neural retina, and pigmented retina was efficiently induced from embryonic stem cells. Refractile cell masses containing lens and neural retina were surrounded by retinal pigment epithelium layers and, thus, designated as eye-like structures. Developmental processes required for eye development appear to proceed in this culture system, because the formation of the eye-like structures depended on the expression of Pax6, a key transcription factor for eye development. The present culture system opens up the possibility of examining early stages of eye development and also of producing cells for use in cellular therapy for various diseases of the eye. Developmental Dynamics 228:664–671, 2003. © 2003 Wiley-Liss, Inc.