The dorsal lateral geniculate nucleus (dLGN) of the mouse is a model system to study the development of thalamic circuitry. Most studies focus on relay neurons of dLGN, yet little is known about the development of the other principal cell type, intrinsic interneurons. Here we examined whether the structure and function of interneurons relies on retinal signaling. We took a loss-of-function approach and crossed GAD67-GFP mice, which express GFP in dLGN interneurons, with math5 nulls (math5-/-), mutants that lack retinal ganglion cells and retinofugal projections. In vitro recordings and 3-D reconstructions of biocytin-filled interneurons at different postnatal ages showed their development is a multistaged process involving migration, arbor remodeling, and synapse formation. Arbor remodeling begins during the second postnatal week, after migration to and dispersion within dLGN is complete. This phase includes a period of exuberant branching where arbors grow in number, complexity, and field size. Such growth is followed by branch pruning and stabilization, as interneurons adopt a bipolar architecture. The absence of retinal signaling disrupts this process. The math5-/- interneurons fail to branch and prune, and instead maintain a simple, sparse architecture. To test how such defects influence connectivity with dLGN relay neurons, we used DHPG [(RS)-3,5-dihydroxyphenylglycine], the mGluR1,5 agonist that targets F2 terminals. This led to substantial increases in IPSC activity among WT relay neurons but had little impact in math5-/- mice. Together, these data suggest that retinal signaling is needed to support the arbor elaboration and synaptic connectivity of dLGN interneurons.SIGNIFICANCE STATEMENT Presently, our understanding about the development of the dorsal lateral geniculate nucleus is limited to circuits involving excitatory thalamocortical relay neurons. Here we show that the other principal cell type, intrinsic interneurons, has a multistaged developmental plan that relies on retinal innervation. These findings indicate that signaling from the periphery guides the maturation of interneurons and the establishment of inhibitory thalamic circuits.