The development of the vertebrate retina relies on complex regulatory mechanisms to achieve its characteristic layered morphology containing multiple neuronal cell types. While connexin 43 (CX43) is not expressed by mature retinal neurons, mutations in its gene GJA1 are associated with microphthalmia and low vision in patients. To delineate how lack of CX43 affects retinal development, GJA1 was disrupted in human induced pluripotent stem cells (hiPSCs) (GJA1-/-) using CRISPR/Cas9 editing, and these were subsequently differentiated into retinal organoids. GJA1-/- hiPSCs do not display defects in self-renewal and pluripotency, but the resulting organoids are smaller with a thinner neural retina and decreased abundance of many retinal cell types. CX43-deficient organoids express lower levels of the neural marker PAX6 and the retinal progenitor cell (RPC) markers PAX6, SIX3, and SIX6. Conversely, expression of the early neuroectoderm markers SOX1 and SOX2 remains high in GJA1-/- organoids throughout their development. The lack of CX43 results in an increased population of CHX10-positive RPCs that are smaller, disorganized, do not become polarized, and possess a limited ability to commit to retinal fate specification. Our data indicate that lack of CX43 causes a developmental arrest in RPCs that subsequently leads to pan-retinal defects and stunted ocular growth.