Recently developed imaging techniques permit individual cells to be uniquely labeled and followed over time as development proceeds in intact vertebrate embryos. Small groups of cells in the developing eye rudiment of the frog Xenopus have been labeled with the vital dyes DiI, lysinated fluorescein dextran (LFD) or lysinated rhodamine dextran (LRD). Individual optic axons and their growth cones were clearly visible in the intact living animal using confocal microscopy or epifluorescence microscopy with a low light level video camera and computer-based video image enhancement. To follow the dynamics of single optic nerve fiber terminal arborizations, small groups of cells, or even single retinal ganglion cells, were labeled with DiI, and the resulting labeled optic nerve fibers were imaged using a confocal microscope. The images show a profound alteration in morphology from day to day, demonstrating that optic nerve terminal arborizations are dynamic structures constantly extending and retracting branches. To follow the topography of the developing projection and analyze the cues that guide its formation, small groups of eyebud cells from LFD- and LRD-labeled donor embryos were grafted to an unlabeled host in either a location equivalent to that from which they had been removed (homotopic grafts) or a non-equivalent location (heterotopic grafts). Axons from homotopic grafts projected to the tectum as expected from the adult topography of the retinotectal projection. Dorsoventral topography was present from the time that the optic nerve fibers were observable in the tectum, in agreement with previous work. Nasotemporal topography was subtle or absent for the first few days, and then slowly refined. The importance of positional cues was tested by performing heterotopic eyebud grafts, in which the labeled eyebud cells are grafted to inappropriate places in the host eyebud. The heterotopic grafts appeared to integrate with the ectopic site in the eyebud in a functional manner. They should, therefore, project to the tectum together with their new neighbors if neighbor interactions or activity-based cues were of primary importance in the initial patterning of the map. However, the experiments showed that the axons from heterotopic grafts always behaved in a fashion appropriate to their position of origin in the donor, regardless of their final position in the host. These observations indicate that small groups of eyebud cells (as small as a single cell) possess positional information that plays a dominant role in guiding the optic nerve fibers to their target sites in the tectum.