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Maturation of the mammalian nervous system requires adequate provision of thyroid hormone and mechanisms that enhance tissue responses to the hormone. Here, we report that the development of cones, the photoreceptors for daylight and color vision, requires protection from thyroid hormone by type 3 deiodinase, a thyroid hormone-inactivating enzyme. Type 3 deiodinase, encoded by Dio3, is expressed in the immature mouse retina. In Dio3^−/− mice, ∼80% of cones are lost through neonatal cell death. Cones that express opsin photopigments for response to both short (S) and medium-long (M) wavelength light are lost. Rod photoreceptors, which mediate dim light vision, remain essentially intact. Excessive thyroid hormone in wild-type pups also eliminates cones. Cone loss is mediated by cone-specific thyroid hormone receptor β2 (TRβ2) as deletion of TRβ2 rescues cones in Dio3^−/− mice. However, rescued …