Purpose: The generation of three-dimensional (3D) organoids with optic cup-like structures from pluripotent stem cells has created opportunities for investigating mammalian retinal development in vitro. However, retinal organoids in culture do not completely reflect the developmental state and in vivo architecture of the rod-dominant mouse retina. The goals of this study were to develop an efficient protocol for generating retinal organoids from stem cells and examine the morphogenesis of rods in vitro. Methods: To assess rod photoreceptor differentiation in retinal organoids, we took advantage of Nrl-green fluorescent protein (GFP) mice that show rod-specific expression of GFP directed by the promoter of leucine zipper transcription factor NRL. Using embryonic and induced pluripotent stem cells (ESCs and iPSCs, respectively) derived from the Nrl-GFP mouse, we were successful in establishing long-term retinal organoid cultures using modified culture conditions (called High Efficiency Hypoxia Induced Generation of Photoreceptors in Retinal Organoids, or HIPRO). Results: We demonstrated efficient differentiation of pluripotent stem cells to retinal structures. More than 70% of embryoid bodies formed optic vesicles at day (D) 7, >50% produced optic cups by D10, and most of them survived until at least D35. The HIPRO organoids included distinct inner retina neurons in a somewhat stratified architecture and mature Müller glia spanning the entire retina. Almost 70% of the cells in the retinal organoids were rod photoreceptors that exhibited elongated cilia. Transcriptome profiles of GFP+ rod photoreceptors, purified from organoids at D25-35, demonstrated a high correlation with the gene profiles of purified rods from the mouse retina at P2 to P6, indicating their early state of differentiation. Conclusions: The 3D retinal organoids, generated by HIPRO method, closely mimic in vivo retinogenesis and provide an efficient in vitro model to investigate photoreceptor development and modeling disease pathology.