Embryonic neural retinas of avians produce lenses under spreading culture conditions. This phenomenon has been regarded as a paradigm of transdifferentiation due to the overt change in cell type. Here we elucidated the underlying mechanisms. Retina-to-lens transdifferentiation occurs in spreading cultures, suggesting that it is triggered by altered cell-cell interactions. Thus, we tested the involvement of Notch signaling based on its role in retinal neurogenesis. Starting from E8 retina, a small number of crystallin-expressing lens cells began to develop after 20 days in control spreading cultures. By contrast, addition of Notch signal inhibitors to cultures after day 2 strongly promoted lens development beginning at day 11, and a 10-fold increase in δ-crystallin expression level. After Notch signal inhibition, transcription factor genes that regulate the early stage of eye development, Prox1 and Pitx3, were sequentially activated. These observations indicate that the lens differentiation potential is intrinsic to the neural retina, and this potential is repressed by Notch signaling during normal embryogenesis. Therefore, Notch suppression leads to lens transdifferentiation by disinhibiting the neural retina-intrinsic program of lens development.