Vision in all vertebrates is dependent on an exchange of retinoids between the retinal pigment epithelium and the visual photoreceptors. It has been proposed that the interphotoreceptor retinoid-binding protein (IRBP) is essential for this intercellular exchange, and that it serves to prevent the potentially cytotoxic effects of retinoids. Although its precise function in vivo has yet to be defined, the early expression of IRBP suggests that it may also be required for normal photoreceptor development. To further assess the biological role of IRBP, we generated transgenic mice with targeted disruption of the IRBP gene (IRBP-/- mice). Specifically, homologous recombination was used to replace the first exon and promoter region of the IRBP gene with a phosphoglycerate kinase-promoted neomycin-resistant gene. Immunocytochemical and Western blot analyses demonstrated the absence of IRBP expression in the IRBP-/- mice. As early as postnatal day 11, histological examination of the retinas of IRBP-/- mice revealed a loss of photoreceptor nuclei and changes in the structural integrity of the receptor outer segments. At 30 d of age, the photoreceptor abnormalities in IRBP-/- mice were more severe, and electroretinographic recordings revealed a marked loss in photic sensitivity. In contrast, no morphological or electrophysiological changes were detected in age-matched heterozygotes. These observations indicate that normal photoreceptor development and function are highly dependent on the early expression of IRBP, and that in the absence of IRBP there is a slowly progressive degeneration of retinal photoreceptors.