Networks of transcriptional regulatory proteins dictate specification of neural lineages from multipotent retinal progenitors. Rod photoreceptor differentiation requires the basic motif–leucine zipper (bZIP) transcription factor NRL, because loss of Nrl in mice (Nrl^−/−) results in complete transformation of rods to functional cones. To examine the role of NRL in cell fate determination, we generated transgenic mice that express Nrl under the control of Crx promoter in postmitotic photoreceptor precursors of WT and Nrl^−/− retina. We show that NRL expression, in both genetic backgrounds, leads to a functional retina with only rod photoreceptors. The absence of cones does not alter retinal lamination, although cone synaptic circuitry is now recruited by rods. Ectopic expression of NRL in developing cones can also induce rod-like characteristics and partially suppress cone-specific gene expression. We show that NRL is associated with specific promoter sequences in Thrb (encoding TRβ2 transcription factor required for M-cone differentiation) and S-opsin and may, therefore, directly participate in transcriptional suppression of cone development. Our studies establish that NRL is not only essential but is sufficient for rod differentiation and that postmitotic photoreceptor precursors are competent to make binary decisions during early retinogenesis.