Axonal differentiation of retinal bipolar cells has largely been studied by comparing the morphology of these interneurons in fixed tissue at different ages. To better understand how bipolar axonal terminals develop in vivo, we imaged fluorescently labeled cells in the zebrafish retina using time-lapse confocal and two photon microscopy. Using the upstream regulatory sequences from the nyx gene that encodes nyctalopin, we constructed a transgenic fish in which a subset of retinal bipolar cells express membrane targeted yellow fluorescent protein (MYFP). Axonal terminals of these YFP-labeled bipolar cells laminated primarily in the inner half of the inner plexiform layer, suggesting that they are likely to be ON-bipolar cells. Transient expression of MYFP in isolated bipolar cells indicates that two or more subsets of bipolar cells, with one or two terminal boutons, are labeled. Live imaging of YFP-expressing bipolar cells in the nyx::MYFP transgenic fish at different ages showed that initially, filopodial-like structures extend and retract from their primary axonal process throughout the inner plexiform layer (IPL). Over time, filopodial exploration becomes concentrated at discrete foci prior to the establishment of large terminal boutons, characteristic of the mature form. This sequence of axonal differentiation suggests that synaptic targeting by bipolar cell axons may involve an early process of trial and error, rather than a process of directed outgrowth and contact. Our observations represent the first in vivo visualization of axonal development of bipolar cells in a vertebrate retina.