In the developing neural retina (NR), multipotent stem cells within the ciliary margin (CM) contribute to de novo retinal tissue growth. We recently reported the ability of human embryonic stem cells (hESCs) to self-organize stratified NR using a three-dimensional culture technique. Here we report the emergence of CM-like stem cell niches within human retinal tissue. First, we developed a culture method for selective NR differentiation by timed BMP4 treatment. We then found that inhibiting GSK3 and FGFR induced the transition from NR tissue to retinal pigment epithelium (RPE), and that removing this inhibition facilitated the reversion of this RPE-like tissue back to the NR fate. This step-wise induction-reversal method generated tissue aggregates with RPE at the margin of central-peripherally polarized NR. We demonstrate that the NR-RPE boundary tissue further self-organizes a niche for CM stem cells that functions to expand the NR peripherally by de novo progenitor generation.