Intraocular delivery of a variety of neurotrophic factors has been widely investigated as a potential treatment for retinal dystrophy (RD). The most commonly studied factor, ciliary neurotrophic factor (CNTF), has been shown to preserve retinal morphology and to promote cell survival in a variety of models of RD. In order to evaluate CNTF as a potential treatment for RD, we used the Prph2(Rd2/Rd2) mouse. CNTF was expressed intraocularly using AAV-mediated gene delivery either by itself or, in a second treatment group, combined with AAV-mediated gene replacement therapy of peripherin2, which we have previously shown to improve photoreceptor structure and function. We confirmed in both groups of animals that CNTF reduces the loss of photoreceptor cells. Visual function, however, as assessed over a time course by electroretinography (ERG), was significantly reduced compared with untreated controls. Furthermore, CNTF gene expression negated the effects on function of gene replacement therapy. In order to test whether this deleterious effect is only seen when degenerating retina is treated, we recorded ERGs from wild-type mice following intraocular injection of AAV expressing CNTF. Here a marked deleterious effect was noted, in which the b-wave amplitude was reduced by at least 50%. Our results demonstrate that intraocular CNTF gene delivery may have a deleterious effect on the retina and caution against its application in clinical trials.