We report on the successful use of chemically modified Y79 human retinoblastoma cells for intraretinal xenografting into damaged adult mammalian eyes. Y79 cells were exposed in vitro to retinoic acid/butyrate to induce differentiation. Using a multisite transplantation method, the suspension was injected into the subretinal space of Fischer 344 rats. The survival, integration, and differentiation potential of these cells was studied, following their return to the intraocular milieu from which the progenitor cells originated. The grafted cells survived and differentiated into immature photoreceptor elements in the subretinal and intraretinal locations, as multiple clusters of rosette-forming cells intimately attached to the host neuroretina. The differentiation process included development of synaptic connectivity of the ribbon type with the surrounding neuropil. No signs of renewed cell division were found within grafts performed on 42 rat eyes, and there was no indication of cell-mediated host reaction against the transplants. This study indicates that tumorigenicity can be suppressed in mitotically arrested Y79 cells, and that these cells are capable of undergoing differentiation in vivo. This provides evidence of the remarkable differentiation properties of human retinoblastomas while indicating that Y79 cells may ultimately be able to substitute for fetal cells in experimental retinal transplantation.