The importance of heparan sulfate proteoglycans (HSPGs) in neurodevelopment is becoming increasingly clear. However, studies on HSPGs are hampered by pleiotropic effects when synthesis or modification of heparan sulfate itself is targeted, and by redundancy when the core proteins are altered. Gain-of-function experiments can sometimes circumvent these issues. Here we establish that transgenic mice overexpressing the HSPG agrin have severe ocular dysgenesis. The defects occur through a gain-of-function mechanism and penetrance is dependent on agrin dosage. The agrin-induced developmental defects are highly variable, and include anophthalmia, persistence of vitreous vessels, and fusion of anterior chamber structures. A frequently observed defect is an optic stalk coloboma leading to the misdifferentiation of the optic stalk as retina, which becomes continuous with the forebrain. The defects in optic-stalk differentiation correlate with reduced sonic hedgehog immunoreactivity and overexpansion of the PAX6 domain from the retina into the optic stalk. The ocular phenotypes associated with agrin overexpression are dependent on genetic background, occurring with high penetrance in inbred C57BL/6J mice. Distinct loci sensitizing C57BL/6J mice to agrin-induced dysgenesis were identified. These results indicate that agrin overexpression will provide a tool to explore the molecular interactions of the extracellular matrix and cell surface in eye development, and provide a means for identifying modifier loci that sensitize mice to developmental eye defects.