ATRX is an SWI/SNF-like chromatin remodeling protein that is mutated in several X-linked mental retardation syndromes, including the ATR-X syndrome. In mice, Atrx expression is widespread and attempts to understand its function in brain development are hampered by the lethality associated with ubiquitous or forebrain-restricted ablation of this gene. One way to circumvent this problem is to study its function in a region of the brain that is dispensable for long-term survival of the organism. The retina is a well-characterized tractable model of CNS development and in our review of 202 ATR-X syndrome patients, we found ocular defects present in ∼25% of the cases, suggesting that studying Atrx in this tissue will provide insight into function. We report that Atrx is expressed in the neuroprogenitor pool in embryonic retina and in all cell types of the mature retina with the exception of rod photoreceptors. Conditional inactivation of Atrx in the retina during embryogenesis ultimately results in a loss of only two types of neurons, amacrine and horizontal cells. We show that this defect does not arise from a failure to specify these cells but rather a defect in interneuron differentiation and survival post-natally. The timing of cell loss is concomitant with light-dependent changes in synaptic organization in the retina and with a change in Atrx subnuclear localization within these interneurons. Moreover, these interneuron defects are associated with functional deficits as demonstrated by reduced b-wave amplitudes upon electroretinogram analysis. These results implicate a role for Atrx in interneuron survival and differentiation.