Dietary vitamin A is metabolized into bioactive retinoic acid (RA) in vivo and regulates the development of many embryonic tissues. RA signaling is active in the oral ectoderm-derived tissues of the neuroendocrine system, but its role there has not yet been fully explored. We show here that RA signaling is active during pituitary organogenesis and dependent on the pituitary transcription factor Prop1. Prop1-mutant mice show reduced expression of the aldehyde dehydrogenase gene Aldh1a2, which metabolizes the vitamin A-intermediate retinaldehyde into RA. To elucidate the specific function of RA signaling during neuroendocrine development, we studied a conditional deletion of Aldh1a2 and a dominant-negative mouse model of inhibited RA signaling during pituitary organogenesis. These models partially phenocopy Prop1-mutant mice by exhibiting embryonic pituitary dysmorphology and reduced hormone expression, especially thyrotropin. These findings establish the role of RA in embryonic pituitary stem cell progression to differentiated hormone cells and raise the question of gene-by-environment interactions as contributors to pituitary development and disease.