Norrie disease is an X-linked retinal dysplasia that presents with congenital blindness, sensorineural deafness, and mental retardation. Norrin, the protein product of the Norrie disease gene (NDP), is a secreted protein of unknown biochemical function. Norrie disease (Ndp^y/-) mutant mice that are deficient in norrin develop blindness, show a distinct failure in retinal angiogenesis, and completely lack the deep capillary layers of the retina. We show here that the transgenic expression of ectopic norrin under control of a lens-specific promoter restores the formation of a normal retinal vascular network in Ndp^y/- mutant mice. The improvement in structure correlates with restoration of neuronal function in the retina. In addition, lenses of transgenic mice with ectopic expression of norrin show significantly more capillaries in the hyaloid vasculature that surrounds the lens during development. In vitro, lenses of transgenic mice in coculture with microvascular endothelial cells induce proliferation of the cells. Transgenic mice with ectopic expression of norrin show more bromodeoxyuridine-labeled retinal progenitor cells at embryonic day 14.5 and thicker retinas at postnatal life than wild-type littermates, indicating a putative direct neurotrophic effect of norrin. These data provide direct evidence that norrin induces growth of ocular capillaries and that pharmacologic modulation of norrin might be used for treatment of the vascular abnormalities associated with Norrie disease or other vascular disorders of the retina.