The mouse Pde6d gene encodes a ubiquitous prenyl binding protein, termed PrBP/delta, of largely unknown physiological function. PrBP/delta was originally identified as a putative rod cGMP phosphodiesterase (PDE6) subunit in the retina, where it is relatively abundant. To investigate the consequences of Pde6d deletion in retina, we generated a Pde6d(-/-) mouse by targeted recombination. Although manifesting reduced body weight, the Pde6d(-/-) mouse was viable and fertile and its retina developed normally. Immunocytochemistry showed that farnesylated rhodopsin kinase (GRK1) and prenylated rod PDE6 catalytic subunits partially mislocalized in Pde6d(-/-) rods, whereas rhodopsin was unaffected. In Pde6d(-/-) rod single-cell recordings, sensitivity to single photons was increased and saturating flash responses were prolonged. Pde6d(-/-) scotopic paired-flash electroretinograms indicated a delay in recovery of the dark state, likely due to reduced levels of GRK1 in rod outer segments. In Pde6d(-/-) cone outer segments, GRK1 and cone PDE6alpha' were present at very low levels and the photopic b-wave amplitudes were reduced by 70%. Thus the absence of PrBP/delta in retina impairs transport of prenylated proteins, particularly GRK1 and cone PDE, to rod and cone outer segments, resulting in altered photoreceptor physiology and a phenotype of a slowly progressing rod/cone dystrophy.