The zinc-finger transcription factor insulinoma-associated 1 (Insm1, previously IA-1) is expressed in the developing nervous and neuroendocrine systems, and is required for cell type specific differentiation. Expression of Insm1 is largely absent in the adult, although it is present in neurogenic regions of the adult brain and zebrafish retina. While expression of Insm1 has also been observed in the embryonic retina of numerous vertebrate species, its function during retinal development has remained unexplored. Here, we demonstrate that in the developing zebrafish retina, insm1a is required for photoreceptor differentiation. Insm1a-deficient embryos were microphthalmic and displayed defects in rod and cone photoreceptor differentiation. Rod photoreceptor cells were more sensitive to loss of insm1a expression than were cone photoreceptor cells. Additionally, we provide evidence that insm1a regulates cell cycle progression of retinoblasts, and functions upstream of the bHLH transcription factors ath5/atoh7 and neurod, and the photoreceptor specification genes crx and nr2e3. Finally, we show that insm1a is negatively regulated by Notch-Delta signaling. Taken together, our data demonstrate that Insm1 influences neuronal subtype differentiation during retinal development.