The retina has a unique three-dimensional architecture, the precise organization of which allows for complete sampling of the visual field. Along the radial or apicobasal axis, retinal neurons and their dendritic and axonal arbors are segregated into layers, while perpendicular to this axis, in the tangential plane, four of the six neuronal types form patterned cellular arrays, or mosaics. Currently, the molecular cues that control retinal cell positioning are not well-understood, especially those that operate in the tangential plane. Here we investigated the role of the PTEN phosphatase in establishing a functional retinal architecture.In the developing retina, PTEN was localized preferentially to ganglion, amacrine and horizontal cells, whose somata are distributed in mosaic patterns in the tangential plane. Generation of a retina-specific Pten knock-out resulted in retinal ganglion, amacrine and horizontal cell hypertrophy, and expansion of the inner plexiform layer. The spacing of Pten mutant mosaic populations was also aberrant, as were the arborization and fasciculation patterns of their processes, displaying cell type-specific defects in the radial and tangential dimensions. Irregular oscillatory potentials were also observed in Pten mutant electroretinograms, indicative of asynchronous amacrine cell firing. Furthermore, while Pten mutant RGC axons targeted appropriate brain regions, optokinetic spatial acuity was reduced in Pten mutant animals. Finally, while some features of the Pten mutant retina appeared similar to those reported in Dscam-mutant mice, PTEN expression and activity were normal in the absence of Dscam.We conclude that Pten regulates somal positioning and neurite arborization patterns of a subset of retinal cells that form mosaics, likely functioning independently of Dscam, at least during the embryonic period. Our findings thus reveal an unexpected level of cellular specificity for the multi-purpose phosphatase, and identify Pten as an integral component of a novel cell positioning pathway in the retina.