Balanced organogenesis requires the orchestration of multiple cellular interactions to create the collective cell behaviours that progressively shape developing tissues. It is currently unclear how individual, localized parts are able to coordinate with each other to develop a whole organ shape. Here we report the dynamic, autonomous formation of the optic cup (retinal primordium) structure from a three-dimensional culture of mouse embryonic stem cell aggregates. Embryonic-stem-cell-derived retinal epithelium spontaneously formed hemispherical epithelial vesicles that became patterned along their proximal–distal axis. Whereas the proximal portion differentiated into mechanically rigid pigment epithelium, the flexible distal portion progressively folded inward to form a shape reminiscent of the embryonic optic cup, exhibited interkinetic nuclear migration and generated stratified neural retinal tissue, as seen in vivo. We demonstrate that optic-cup morphogenesis in this simple cell culture depends on an intrinsic self-organizing program involving stepwise and domain-specific regulation of local epithelial properties.