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The retina has a very high energy demand but lacks an internal blood supply in most vertebrates. Here we explore the hypothesis that oxygen diffusion limited the evolution of retinal morphology by reconstructing the evolution of retinal thickness and the various mechanisms for retinal oxygen supply, including capillarization and acid-induced haemoglobin oxygen unloading. We show that a common ancestor of bony fishes likely had a thin retina without additional retinal oxygen supply mechanisms and that three different types of retinal capillaries were gained and lost independently multiple times during the radiation of vertebrates, and that these were invariably associated with parallel changes in retinal thickness. Since retinal thickness confers multiple advantages to vision, we propose that insufficient retinal oxygen supply constrained the functional evolution of the eye in early vertebrates, and that recurrent origins of additional retinal oxygen supply mechanisms facilitated the phenotypic evolution of improved functional eye morphology.