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Muscarinic acetylcholine receptors (mAChRs) play an important role in signal processing in the retina. We have used subtype-specific antibodies to identify the changes in the localization of mAChR expression during embryonic development of the retina in vivo and their relationship to the changes in mAChRs in retinal cells in culture. We have demonstrated previously that treatment of fresh retinal cultures with conditioned media from mature retinal cultures specifically induces expression of the M(2) mAChR (McKinnon et al., 1998). We show that the M(2)-inducing activity, which we tentatively have called MARIA (muscarinic acetylcholine receptor-inducing activity) is produced by Müller glial cells in culture, because significant activity can be found in media conditioned by essentially neuron-free cultures of Müller glia, as well as by a Müller glial cell line but not several neuroblastoma cell lines. We also demonstrate that the appearance of the M(2) receptor in vivo occurs concomitantly with the appearance of significant numbers of Müller glial cells in the developing retina. Furthermore, the administration of crude or partially purified preparations of MARIA to developing chick embryos in ovo induces precocious expression of M(2) mAChRs in the appropriate cell types in the retina. These results show that a factor secreted by cultured retinal Müller glia can regulate M(2) mAChR expression in vivo and in vitro and suggest that the secretion of MARIA by Müller glia in vivo may be responsible for the normal induction of M(2) mAChR expression during embryonic development.