Retinoic acid (RA) is known to be required at various levels of eye patterning via Retinoic Acid Receptors (RAR); however the molecular and cellular mechanisms triggered by these nuclear receptors are still obscure. The genetic studies performed here enable us to present a new model to study RA action during eye development. By inactivating the three RARs, specifically in the periocular mesenchyme, we discriminate the individual contribution of each RAR during eye development and describe a new function for RARs during the formation of the optic nerve. We demonstrate that RARα is the only receptor that mediates RA signalling in the neurectoderm during ocular development. Surprisingly, and despite a sophisticated pattern of RA-activity in the developing retina, we observed that RA signalling is not autonomously required in this tissue for eye formation. We show that the action of RA during eye morphogenesis is occurring specifically in neural crest-derived periocular mesenchyme and is mediated by all three RARs. Furthermore, we point out that Pitx2, which encodes a homeodomain transcription factor, is a key RA-responsive gene in neural crest cells during eye development. Interestingly, we observed that RA is required in the neural crest cells for normal position of the extraocular muscle.