The death of cone and rod cells – the photoreceptors that mediate phototransduction – causes visual loss in millions of people worldwide. Currently, human embryonic stem cells (hESCs) can be differentiated into photoreceptors but the process is inefficient and long. Now, Gilbert Bernier and colleagues (see p. 3294) report that the exposure of hESCs to COCO, a member of the Cerberus gene family, and insulin growth factor 1 (IGF1) in a feeder- and serum-free culture system efficiently differentiates them into functional cone photoreceptors. Such cells express cone-specific genes and key phototransduction proteins, and degrade cGMP when exposed to light – a unique property of photoreceptors. COCO-induced retinal progenitors can also self-organise into polarised sheets of morphologically differentiated cone photoreceptors that show evidence of connecting cilium and outer segment formation and adopt a cone photoreceptor fate in vivo upon injection into the mouse eye. Mechanistically, COCO acts as a potent neural and photoreceptor inducer by simultaneously inhibiting BMP, TGFβ and Wnt signalling, which suggests that cones are formed by default, and this inhibitory activity is potentiated by IGF1. This study provides an efficient and rapid means to generate cone photoreceptors and opens the way to biochemical and genetic studies of photoreceptor development and pathology for regenerative purposes.