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Abstract Intraocular medulloepithelioma (IO-MEPL) is a rare embryonal ocular neoplasm, prevalently occurring in children. IO-MEPLs share histomorphological features with CNS embryonal tumors with multilayered rosettes (ETMRs), referred to as intracranial medulloepitheliomas. While Sonic hedgehog (SHH) and WNT signaling pathways are crucial for ETMR pathogenesis, the impact of these pathways on human IO-MEPL development is unclear. Gene expression analyses of human embryonal tumor samples revealed similar gene expression patterns and significant overrepresentation of SHH and WNT target genes in both IO-MEPL and ETMR. In order to unravel the function of Shh and Wnt signaling for IO-MEPL pathogenesis in vivo, both pathways were activated in retinal precursor cells in a time point specific manner. Shh and Wnt co-activation in early Sox2- or Rax-expressing precursor cells resulted in infiltrative ocular lesions that displayed extraretinal expansion. Histomorphological, immunohistochemical, and molecular features showed a strong concordance with human IO-MEPL. We demonstrate a relevant role of WNT and SHH signaling in IO-MEPL and report the first mouse model to generate tumor-like lesions with features of IO-MEPL. The presented data may be fundamental for comprehending IO-MEPL initiation and developing targeted therapeutic approaches.