The avian ciliary ganglion contains choroid neurons that innervate choroid vasculature and express somatostatin as well as ciliary neurons that innervate iris/ciliary body but do not express somatostatin. We have previously shown in culture that activin A induces somatostatin immunoreactivity in both neuron populations. We now show in vivo that both targets contain activin A; however, choroid expressed higher levels of activin A mRNA. In contrast, follistatin, an activin A inhibitor, was higher in iris/ciliary body. Iris cell-conditioned medium also contained an activity that inhibited activin A and could be depleted with anti-follistatin antibodies. These results suggest that development of somatostatin is limited to choroid neurons by differential expression of activin A and follistatin in ciliary ganglion targets.