In the vertebrate retina, vision is initiated and maintained by the photolysis and regeneration, respectively, of light-sensitive pigments in the disk membranes of the photoreceptor outer segments. This cyclical process depends on an exchange of retinoids between the photoreceptors and the retinal pigment epithelium (RPE). There is a great deal of indirect evidence that the transport of retinoids between these cellular compartments is mediated by the interphotoreceptor retinoid-binding protein (IRBP), a large glycoprotein synthesized in the photoreceptors and extruded into the interphotoreceptor matrix (IPM) that fills the subretinal space. Nevertheless, a number of in vitro experiments have demonstrated that an intermembranous transfer of retinoids can occur through an aqueous medium independent of any retinoid-binding protein. This led to the suggestion that IRBP may play the more passive role of an extracellular buffer, serving to prevent the degradation and potentially cytotoxic effects of free retinoids when large amounts are released into the IPM. We have studied the structural and functional properties of transgenic mice in which homologous recombination was used to delete the IRBP gene. Light- and electron-microscopic examination of the retinas of “knockout” (IRBP−/−) mice revealed a significant loss of photoreceptor nuclei, and profound changes in the structure and organization of the receptor outer segments. Consistent with these observations, electroretinographic recordings showed a marked reduction in response amplitude for both rod- and cone-mediated potentials. However, despite the histological and electrophysiological changes, there was no evidence of gross abnormalities in the visual cycle. After bleaching a significant fraction of the available rhodopsin, electroretinogram amplitude and rhodopsin density gradually increased toward their pre-bleach levels, and the rates of recovery were even more rapid than those seen in wild-type (IRBP+/+) mice.