NR2E3 is an orphan nuclear receptor whose loss-of-function causes abnormal retinal photoreceptor development and degeneration. However, despite that many nuclear receptors are regulated by binding of small molecule ligands, biological small molecule ligands regulating NR2E3 have not been identified. Identification of an endogenous NR2E3 ligand might reveal a previously unrecognized component contributing to retinal development and maintenance. Here we report that biliverdin, a conserved green pigment from heme catabolism, regulates NR2E3 and is necessary for zebrafish retinal photoreceptor development. Biliverdin from retinal extracts specifically bound to NR2E3's ligand-binding domain and induced NR2E3-dependent reporter gene expression. Inhibition of biliverdin synthesis decreased photoreceptor cell populations in zebrafish larvae, and this phenotype was alleviated by exogenously supplied biliverdin. Thus, biliverdin is an endogenous small molecule ligand for NR2E3 and a component necessary for the proper development of photoreceptor cells. This result suggests a possible role of heme metabolism in the regulation of retinal photoreceptor cell development.