The rod outer segment ATP binding cassette (ABC) transporter protein (ABCR) plays an important role in retinal rod cells presumably transporting retinal. Genetic studies in humans have linked mutations in the ABCR gene to a number of inherited retinal diseases particularly Stargardt macular degeneration and age-related macular degeneration (ARMD). The ABCR protein is characterized by two nucleotide binding domains and two transmembrane domains, each consisting of six membrane-spanning helices. We have cloned and expressed the 376 amino acid (aa) C-terminal end of this protein (amino acid residues 1898-2273) containing the second nucleotide binding domain (NBD2) with a purification tag at its amino terminus. The expressed protein was found to be soluble and was purified using a rapid and high-yield single-step procedure. The purified protein was monomeric and migrated as a 43 kDa protein in SDS-PAGE. The purified NBD2 protein had strong ATPase activity with a K(m) of 631 microM and V(max) of 144 nmol min(-1) mg(-1). This ATPase activity on normalization was kinetically comparable to that observed for purified and reconstituted native ABCR. Nucleotide inhibition studies suggest that the binding of NBD2 is specific for ATP/dATP, and that none of the other ribonucleotides appeared to compete for binding at this site. These studies demonstrate that cloned and expressed NBD2 protein is a fully functional ATPase in the absence of the remainder of the molecule. The level of ATPase activity was comparable to that of trans-retinal-stimulated ABCR ATPase. The NBD2 expression plasmid was used to generate a Leu2027Phe mutation associated with Stargardt disease. Analysis of the ATPase activity of the mutant protein demonstrated that it had a 14-fold increase in binding affinity (K(m) = 46 microM) with a corresponding 9-fold decrease in the rate of hydrolysis (V(max) = 16.6 nmol min(-1) mg(-1)), indicating a significant alteration of the ATPase function. It also provided a molecular basis of Stargardt disease involving this mutation.