Iris epithelium is a double-layered pigmented cuboidal epithelium. According to the current model, the neural retina and the posterior iris pigment epithelium (IPE) are derived from the inner wall of the optic cup, while the retinal pigment epithelium (RPE) and the anterior IPE are derived from the outer wall of the optic cup during development. Our current study shows evidence, contradicting this model of fetal iris development. We demonstrate that human fetal iris expression patterns of Otx2 and Mitf transcription factors are similar, while the expressions of Otx2 and Sox2 are complementary. Furthermore, IPE and RPE exhibit identical morphologic development during the early embryonic period. Our results suggest that the outer layer of the optic cup forms two layers of the iris epithelium, and the posterior IPE is the inward-curling anterior rim of the outer layer of the optic cup. These findings provide a reasonable explanation of how IPE cells can be used as an appropriate substitute for RPE cells.