The retinoblastoma tumor suppressor (RB) plays an important role in the regulation of cell cycle progression and terminal differentiation of many cell types. Rb(-/-) mouse embryos die at midgestation with defects in cell cycle regulation, control of apoptosis and terminal differentiation. However, chimeric mice composed of wild-type and Rb-deficient cells are viable and show minor abnormalities. To determine the role of Rb in development more precisely, we analyzed chimeric embryos and adults made with marked Rb(-/-) cells. Like their germline Rb(-/-) counterparts, brains of midgestation chimeric embryos exhibited extensive ectopic S-phase entry. In Rb-mutants, this is accompanied by widespread apoptosis. However, in chimeras, the majority of Rb-deficient cells survived and differentiated into neuronal fates. Rescue of Rb(-/-) neurons in the presence of wild-type cells occurred after induction of the p53 pathway and led to accumulation of cells with 4n DNA content. Therefore, the role of Rb during development can be divided into a cell-autonomous function in exit from the cell cycle and a non-cell-autonomous role in the suppression of apoptosis and induction of differentiation.