Neuronal populations display conspicuous variability in their size among individuals, but the genetic sources of this variation are largely undefined. We demonstrate a large and highly heritable variation in neuron number within the mouse retina, affecting a critical population of interneurons, the horizontal cells. Variation in the size of this population maps to the distal end of chromosome (Chr) 13, a region homologous to human Chr 5q11.1–11.2. This region contains two genes known to modulate retinal cell number. Using conditional knock-out mice, we demonstrate that one of these genes, the LIM homeodomain gene Islet-1 (Isl1), plays a role in regulating horizontal cell number. Genetic differences in Isl1 expression are high during the period of horizontal cell production, and cis-regulation of Isl1 expression within the retina is demonstrated directly. We identify a single nucleotide polymorphism in the 5′ UTR of Isl1 that creates an E-box sequence as a candidate causal variant contributing to this variation in horizontal cell number.