The major active retinoid, all-trans retinoic acid, has long been recognized as critical for the development of several organs, including the eye. Mutations in STRA6, the gene encoding the cellular receptor for vitamin A, in patients with Matthew–Wood syndrome and anophthalmia/microphthalmia (A/M), have previously demonstrated the importance of retinol metabolism in human eye disease. We used homozygosity mapping combined with next-generation sequencing to interrogate patients with anophthalmia and microphthalmia for new causative genes. We used whole-exome and whole-genome sequencing to study a family with two affected brothers with bilateral A/M and a simplex case with bilateral anophthalmia and hypoplasia of the optic nerve and optic chiasm. Analysis of novel sequence variants revealed homozygosity for two nonsense mutations in ALDH1A3, c.568A>G, predicting p.Lys190*, in the familial cases, and c.1165A>T, predicting p.Lys389*, in the simplex case. Both mutations predict nonsense-mediated decay and complete loss of function. We performed antisense morpholino (MO) studies in Danio rerio to characterize the developmental effects of loss of Aldh1a3 function. MO-injected larvae showed a significant reduction in eye size, and aberrant axonal projections to the tectum were noted. We conclude that ALDH1A3 loss of function causes anophthalmia and aberrant eye development in humans and in animal model systems.