Visual function was evaluated in transgenic mice expressing the simian virus 40 early region under the control of the promoter for phenylethanolamine-N-methyltransferase. These transgenic mice undergo a degeneration of the retinal horizontal cells and the outer plexiform layer. Electroretinograms (ERGs) were recorded under stimulus conditions chosen to elicit both receptoral and postreceptoral responses. The dark-adapted a-waves obtained from transgenic mice were not different from control recordings, indicating that the degenerative process does not interfere with function of the rod photoreceptors. In comparison, the ERG b-wave was markedly reduced in transgenic mice under both dark- and light-adapted conditions. Reproducible visual evoked potentials (VEPs) were recorded from transgenic mice in response to both low luminance stimuli that isolate rod function, and to higher luminance stimuli, indicating that retinal activity is transmitted centrally to the visual cortex. However, VEPs were delayed at all stimulus luminances compared to controls. Analysis of luminance-response functions suggests that the VEP delays could reflect the combination of a decrease in synaptic efficacy and an overall loss in visual sensitivity. These functional abnormalities correlate well with the anatomical abnormalities that have been previously observed in the transgenic retina (Hammang et al., 1993), namely a reduced number of synapses between photoreceptors and second-order neurons.