Over 45 mutations in the rhodopsin gene have been identified in patients with autosomal dominant retinitis pigmentosa, including a cluster near the extreme carboxy-terminus, a region of the protein for which no function has yet been assigned. To elucidate the biochemical defect(s) in this group of mutants, we have studied a naturally occurring stop codon mutation that removes the last five amino acids of rhodopsin (Q344ter). When produced in transfected tissue culture cells, the mutant protein is indistinguishable from the wild type in light- dependent activation of the photoreceptor G-protein (transducin), and in serving as a light-dependent substrate for rhodopskin kinase. Mice that express a Q344ter transgene in rod photoreceptors show nearly normal light responses as determined by suction electrode recordings of the membrane current from single rod outer segments; the main difference between transgenic and nontransgenic responses is a 15% longer time-to-peak in the response of transgenic rods. In the Q344ter transgenic retina, direct immunofluorescent staining with antibodies specific for either wild-type or Q344ter rhodopsin shows abnormal accumulation of the Q344ter, but not the endogenous rhodopsin, in the plasma membrane of the photoreceptor cell body. These data indicate that rhodopsin's carboxy-terminus is required for efficient transportation to or retention in the outer segment.