Physiological consequences of early stages of photoreceptor degeneration were examined in heterozygous P23H rhodopsin transgenic (Tg) and in aging normal Sprague-Dawley rats. Rod photoreceptor and rod bipolar (RB) cell function were estimated with maximum value and sensitivity parameters of P3 and P2 components of the electroretinogram. In both Tg and aging normal rats, the age-related rate of decline of P3 amplitude was steeper than that of the P2 amplitude. Tg rats showed greater than normal sensitivity of the rods. A new model of distal RB pathway connectivity suggested photoreceptor loss could not be the sole cause of physiological abnormalities; there was an additional increase of post-receptoral sensitivity. We propose that changes at rod-RB synapses compensate for the partial loss of rod photoreceptors in senescence and in early stages of retinal degeneration.