The present study examined the role of alternative splicing as a mechanism to create neuronal diversity within the developing retina. The Isl1 gene has two alternatively spliced isoforms, alpha and beta, that are present in the developing retina. The Isl1beta isoform lacks a critical portion of a protein-binding domain with which Isl1 binds to Lhx3 in a known transcriptional complex (Isl1:Lhx3:Ldb1). Developmental analysis of Isl1 expression reveals the Isl1alpha isoform is expressed at higher levels than Isl1beta throughout development and persisting into adulthood. Isl1 isoforms are present in distinct subsets of retinal ganglion cells, with Isl1beta-expressing cells being restricted to cells with soma sizes under 175mu2. A luciferase assay demonstrates the Isl1beta isoform is functionally distinct from Isl1alpha and is not capable of activating the Isl1:Lhx3:Ldb1 complex as Isl1alpha is. These results suggest that Isl1beta containing-complexes may have unique gene targets from Isl1alpha and implicate the alternative splicing of Isl1 as a mechanism contributing to neuronal differentiation during retinal development.