To explore the pathogenic mechanism of dominant mutations affecting the carboxyl terminus of rhodopsin that cause retinitis pigmentosa, we generated five lines of transgenic mice carrying the proline-347 to serine (P347S) mutation. The severity of photoreceptor degeneration correlated with the levels of transgene expression in these lines. Visual function as measured by the electroretinogram was approximately normal at an early age when there was little histologic evidence of photoreceptor degeneration, but it deteriorated as photoreceptors degenerated. Immunocytochemical staining showed the mutant rhodopsin predominantly in the outer segments prior to histologically evident degeneration, a finding supported by quantitation of signal intensities in different regions of the photoreceptor cells by confocal microscopy. A distinct histopathologic abnormality was the accumulation of submicrometer-sized vesicles extracellularly near the junction between inner and outer segments. The extracellular vesicles were bound by a single membrane that apparently contained rhodopsin as revealed by ultrastructural immunocytochemical staining with anti-rhodopsin antibodies. The outer segments, although shortened, contained well-packed discs. Proliferation of the endoplasmic reticulum as reported in Drosophila expressing dominant rhodopsin mutations was not observed. The accumulation of rhodopsinladen vesicles likely represents aberrant transport of rhodopsin from the inner segments to the nascent disc membranes of the outer segments. It is possible that photoreceptor degeneration occurs because of a failure to renew outer segments at a normal rate, thereby leading to a progressive shortening of outer segments, or because of the loss of cellular contents to the extracellular space, or because of both.