The generation of diverse neuronal types and subtypes from multipotent progenitors during development is crucial for assembling functional neural circuits in the adult central nervous system. During mouse retinogenesis, early retinal progenitors give rise to several cell types, including ganglion, amacrine, horizontal, cone, and rod cells. It is unknown at present how each of these fates is selected from the multiple neuronal fates available to the early progenitor. By using a combination of bioinformatic, genetic, and biochemical approaches, we investigated the mechanism by which Foxn4 selects the amacrine and horizontal cell fates from multipotential retinal progenitors. These studies indicate that Foxn4 has an intrinsic activity to suppress the alternative photoreceptor cell fates of early retinal progenitors by selectively activating Dll4-Notch signaling. Gene expression and conditional ablation analyses reveal that Dll4 is directly activated by Foxn4 via phylogenetically conserved enhancers and that Dll4 can partly mediate the Foxn4 function by serving as a major Notch ligand to expand the progenitor pool and limit photoreceptor production. Our data together define a Foxn4-mediated molecular and signaling pathway that underlies the suppression of alternative cell fates of early retinal progenitors.