Zeb2 (Sip1) is a zinc finger homeobox transcription factor known to play multiple roles in the development of the central nervous system. Haploinsufficiency of Zeb2 in Humans leads to Mowat-Wilson syndrome, a congenital disease characterized by intellectual disability, epilepsy and Hirschprung disease. During the development of the neural retina, Zeb2 was shown to be required for generation of horizontal cells and the correct number of amacrine subtypes at least partially through regulation of the expression of of Ptf1a, an important transcription factor for generating amacrine and horizontal lineages. The functions of Zeb2 in late stage of retinogenesis and the mechanism by which it is involved in regulating onset of differentiation remained however unresolved. Here, by unbiased transcriptomic analyses of control and Zeb2-mutant post-natal developing retinae, we demonstrate that somatic deletion of Zeb2 results in up-regulation of Id and Hes1 genes which act as inhibitors of neural differentiation, leading to a decrease in the differentiation of retinal interneurons and over-production of Muller glia cells. This function of Zeb2 is found here to be partially through inhibition of the Smad-mediated activation of the Id1 promoter, suggesting that Zeb2 promotes the timely differentiation of retinal interneurons at least partially through the inhibition of BMP targets that function as inhibitors of gliogenesis. Zeb2 is documented here to integrate extrinsic cues to regulate the balance between neuronal and glia cell types in the murine retina