Cell transplants have successfully restored vision to mice which had lost their sight, leading to hopes people could benefit in the same way.
The cells connected up with other parts of the retina
UK scientists treated animals which had eye damage similar to that seen in many human eye diseases.
They were able to help them see again by transplanting immature retinal stem cells into their eyes.
UK experts welcomed the study, published in the magazine Nature, saying it was "stunning" research.
If the results can be translated into a treatment for human eye disease, it could help the millions of people with conditions ranging from age-related macular degeneration to diabetes.
Once the cone and rod photoreceptors in a retina are lost, they cannot be replaced.
While treatments are being developed which might prevent or delay the loss of these cells, scientists are also seeking to help those already affected.
It is thought the retina is one of the best places to try out cell transplant therapy because photoreceptor loss initially leaves the rest of the wiring to the brain intact.
But previous attempts to transplant stem cells, which can turn into any kind of cell in the body, in the hope that they will become photoreceptors have failed because the cells were not developed enough.
In this study, funded by the Medical Research Council, scientists from the University College London Institutes of Ophthalmology and Child Health and Moorfields Eye Hospital transplanted cells which were more advanced, and already programmed to develop into photoreceptors.
1 - Early stage retinal cells are taken from a newborn mouse
2 - They are transplanted into the retina of a mouse which has lost its sight
3 - The cells implant and connect with existing cells in the eye, restoring some sight to the mouse.
The team took cells from three to five-day-old mice, a stage when the retina is about to be formed.
The cells were then transplanted into animals which had been genetically designed to have conditions which meant they would gradually lose their sight - either mimicking the human disease retinitis pigmentosa or age-related macular degeneration.
The transplants were successful; the photoreceptors implanted and made electrical connections to the animals' existing retinal nerve cells - key to allowing them to see again.
Tests showed that the mice's pupils responded to light and that there was activity in the optical nerve, showing signals were being sent to the brain.
Dr Jane Sowden, one of the study's leaders, said: "Remarkably, we found that the mature retina, previously believed to have no capacity for repair, is in fact able to support the development of new functional photoreceptors."
'Not false hope'
To get human retinal cells at the same stage of development, however, would involve taking stem cells from a foetus during the second trimester of pregnancy.
But Dr Robert MacLaren, a specialist at Moorfields Eye Hospital who worked on the research, said they did not want to go down that route.
He said the aim now would be to look at adult stem cells to see if they could be genetically altered to behave like the mouse retinal cells.
There are some cells on the margin of adult retinas that have been identified as having stem cell-like properties, which the team says could be suitable.
Dr MacLaren stressed it would be some time before patients could benefit from such a treatment, but he said that at least it was now a possibility.
"Everyday, I sit in my clinic and have to tell patients that there's nothing I can do.
"I don't want to give patients false hope. But at least now, if I see a young patient, I can say that there might be something within your lifetime."
Dr Stephen Minger, a stem cell expert at King's College London, said: "I think this is important, superb research - it clearly shows that the host environment is important in directing the integration of transplanted cells."
But Andrew Dick, professor of ophthalmology at the University of Bristol, added: "As with any basic research we have to be careful not to overhype. However, this is a stunning piece of research that may in the distant future lead to transplants in humans to relieve blindness."