FGF signaling plays a pivotal role in eye development. Previous studies using in vitro chick models and systemic zebrafish mutants have suggested that FGF signaling is required for the patterning and specification of the optic vesicle, but due to a lack of genetic models, its role in mammalian retinal development remains elusive. In this study, we show that specific deletion of Fgfr1 and Fgfr2 in the optic vesicle disrupts ERK signaling, which results in optic disc and nerve dysgenesis and, ultimately, ocular coloboma. Defective FGF signaling does not abrogate Shh or BMP signaling, nor does it affect axial patterning of the optic vesicle. Instead, FGF signaling regulates Mitf and Pax2 in coordinating the closure of the optic fissure and optic disc specification, which is necessary for the outgrowth of the optic nerve. Genetic evidence further supports that the formation of an Frs2α-Shp2 complex and its recruitment to FGF receptors are crucial for downstream ERK signaling in this process, whereas constitutively active Ras signaling can rescue ocular coloboma in the FGF signaling mutants. Our results thus reveal a previously unappreciated role of FGF-Frs2α-Shp2-Ras-ERK signaling axis in preventing ocular coloboma. These findings suggest that components of FGF signaling pathway may be novel targets in the diagnosis of and the therapeutic interventions for congenital ocular anomalies.