In vertebrate retinal development, various transcription factors are known to execute essential activities in gene regulation. Although epigenetic modification is considered to play a pivotal role in retinal development, the exact in vivo role of epigenetic regulation is still poorly understood. We observed that G9a histone methyltransferase, which methylates histone H3 at lysine 9 (H3K9), is substantially expressed in the mouse retina throughout development. To address in vivo G9a function in the mouse retina, we ablated G9a in retinal progenitor cells by conditional gene knock-out (G9a Dkk3 CKO). The G9a Dkk3 CKO retina exhibited severe morphological defects, including photoreceptor rosette formation, a partial loss of the outer nuclear layer, elevated cell death, and persistent cell proliferation. Progenitor cell-related genes, including several cyclins, Hes1, Chx10, and Lhx2, are methylated on histone H3K9 in the wild-type retina, but they were defective in H3K9 methylation and improperly upregulated at late developmental stages in the G9a Dkk3 CKO retina. Notably, conditional depletion of G9a in postmitotic photoreceptor precursors (G9a Crx CKO) led to the development of an almost normal retina, indicating that G9a activity mainly in retinal progenitor cells, but not in photoreceptor precursors, is essential for normal terminal differentiation of and survival of the retina. Our results suggest that proper epigenetic marks in progenitor cells are important for subsequent appropriate terminal differentiation and survival of retinal cells by repressing progenitor cell-related genes in differentiating retinal cells.