Genetic studies in Drosophila and in vertebrates have implicated basic helix-loop-helix (bHLH) transcription factors in neural determination and differentiation. In this report, we analyze the role that several bHLH proteins play in the transcriptional control of differentiation in chick retina. Our experimental system exploits the properties of the promoter for the beta 3 subunit of the neuronal acetylcholine receptors, important components of various phenotypes in the CNS of vertebrates. The beta 3 subunit contributes to define ganglion cell identity in retina and its promoter, whose activation is an early marker of ganglion cell differentiation, is under the specific control of the chick atonal homolog ATH5. Functional analysis of the ATH5 promoter indicates that interactions between ATH5 and several other bHLH transcription factors underlie the patterning of the early retinal neuroepithelium and form a regulatory cascade leading to transcription of the gene for beta 3. ATH5 appears to coordinate the transcriptional pathways that control pan-neuronal properties with those that regulate the subtype-specific features of retinal neurons.