Specialized stromal cells occupy and help define B- and T-cell domains, which are crucial for proper functioning of our immune system. Signaling through lymphotoxin and TNF receptors is crucial for the development of different stromal subsets, which are thought to arise from a common precursor. However, mechanisms that control the selective generation of the different stromal phenotypes are not known. Using in vitro cultures of embryonic mouse stromal cells, we show that retinoic acid-mediated signaling is important for the differentiation of precursors towards the Cxcl13pos follicular dendritic cell (FDC) lineage, and also blocks lymphotoxin-mediated Ccl19pos fibroblastic reticular cell lineage differentiation. Accordingly, at the day of birth we observe the presence of Cxcl13posCcl19neg/low and Cxcl13neg/lowCcl19pos cells within neonatal lymph nodes. Furthermore, ablation of retinoic acid receptor signaling in stromal precursors early after birth reduces Cxcl13 expression, and complete blockade of retinoic acid signaling prevents the formation of FDC networks in lymph nodes.