Primary cilia are cellular surface projections enriched in receptors and signaling molecules, acting as signaling hubs that respond to stimuli. Malfunctions in primary cilia have been linked to human diseases, including retinopathies and ocular defects. Here, we focus on TMEM107, a protein localized to the transition zone of primary cilia. TMEM107 mutations were found in patients with Joubert and Meckel–Gruber syndromes. A mouse model lacking Tmem107 exhibited eye defects such as anophthalmia and microphthalmia, affecting retina differentiation. Tmem107 expression during prenatal mouse development correlated with phenotype occurrence, with enhanced expression in differentiating retina and optic stalk. TMEM107 deficiency in retinal organoids resulted in the loss of primary cilia, down-regulation of retina-specific genes, and cyst formation. Knocking out TMEM107 in human ARPE-19 cells prevented primary cilia formation and impaired response to Smoothened agonist treatment because of ectopic activation of the SHH pathway. Our data suggest TMEM107 plays a crucial role in early vertebrate eye development and ciliogenesis in the differentiating retina.