Microphthalmia, coloboma and persistent fetal vasculature within the vitreous cavity are among the most common human congenital ocular anomalies,and each has been associated with a variety of genetic disorders. Here we show that, in the mouse, loss of frizzled 5 (Fz5) - a putative Wnt receptor expressed in the eye field, optic cup and retina - causes all of these defects with high penetrance. In the developing Fz5^-/- eye, the sequence of defects, in order of appearance, is: increased cell death in the ventral retina, delayed and/or incomplete closure of the ventral fissure, an excess of mesenchymal cells in the vitreous cavity, an excess of retinal astrocyte precursors and mature astrocytes, and persistence of the hyaloid vasculature in association with a large number of pigment cells. Fz5^-/- mice also exhibit a late-onset progressive retinal degeneration by ∼6 months of age, which might be related to the expression of Fz5 in Müller glia in the adult retina. These results demonstrate a central role for frizzled signaling in mammalian eye development and are likely to be relevant to the etiology of congenital human ocular anomalies.