Muller glia function as retinal stem cells in adult zebrafish. In response to loss of retinal neurons, Muller glia partially dedifferentiate, re-express neuroepithelial markers and re-enter the cell cycle. We show that the immunoglobulin superfamily adhesion molecule Alcama is a novel marker of multipotent retinal stem cells, including injury-induced Muller glia, and that each Muller glial cell divides asymmetrically only once to produce an Alcama-negative, proliferating retinal progenitor. The initial mitotic division of Muller glia involves interkinetic nuclear migration, but mitosis of retinal progenitors occurs in situ. Rapidly dividing retinal progenitors form neurogenic clusters tightly associated with Alcama/N-cadherin-labeled Muller glial radial processes. Genetic suppression of N-cadherin function interferes with basal migration of retinal progenitors and subsequent regeneration of HuC/D+ inner retinal neurons.