Thyroid hormone receptors generally activate transcription of target genes in the presence of thyroid hormone (T(3)) and repress their transcription in its absence. Here, we investigated the role of unliganded thyroid hormone receptor (TR) during vertebrate development using an amphibian model. Previous studies led to the hypothesis that before production of endogenous T(3), the presence of unliganded receptor is essential for premetamorphic tadpole growth. To test this hypothesis, we generated a Xenopus laevis TR beta mutant construct ineffective for gene repression owing to impaired corepressor NCoR recruitment. Overexpression by germinal transgenesis of the mutant receptor leads to lethality during early development with numerous defects in cranio-facial and eye development. These effects correlate with TR expression profiles at these early stages. Molecular analysis of transgenic mutants reveals perturbed expression of genes involved in eye development. Finally, treatment with iopanoic acid or NH-3, modulators of thyroid hormone action, leads to abnormal eye development. In conclusion, the data reveal a role of unliganded TR in eye development.