A smart electrode that has a built-in CMOS microchip was fabricated for use as a retinal stimulator used in retinal prostheses. The CMOS microchip was embedded into the core of a bullet-shaped stimulus electrode with a microcavity. Because the microchip has a multiplexer function and a stimulus current generator, sophisticated functions could be implemented by the smart electrode. An array of more than one thousand electrodes, which would restore sight in high resolution, could be realized by using this smart electrode. A proof-of-concept electrode was fabricated through the development of an assembly process. We evaluated the fabricated electrode implanted in extracted animal tissue to simulate practical use. Based on this ex vivo experiment, the fabricated electrode showed optimal performance for retinal stimulation. This result is a first step in the development of next-generation retinal prostheses, which will accomplish the restoration of high-resolution sight capable of character recognition.