The rate of synaptic transmission between photoreceptors and bipolar cells has been long known to depend on conditions of ambient illumination. However, the molecular mechanisms that mediate and regulate transmission at this ribbon synapse are poorly understood. We conducted electroretinographic recordings from dark- and light-adapted mice lacking the abundant photoreceptor-specific protein phosducin and found that the ON-bipolar cell responses in these animals have a reduced light sensitivity in the dark-adapted state. Additional desensitization of their responses, normally caused by steady background illumination, was also diminished compared with wild-type animals. This effect was observed in both rod- and cone-driven pathways, with the latter affected to a larger degree. The underlying mechanism is likely to be photoreceptor specific because phosducin is not expressed in other retina neurons and transgenic expression of phosducin in rods of phosducin knock-out mice rescued the rod-specific phenotype. The underlying mechanism functions downstream from the phototransduction cascade, as evident from the sensitivity of phototransduction in phosducin knock-out rods being affected to a much lesser degree than b-wave responses. These data indicate that a major regulatory component responsible for setting the sensitivity of signal transmission between photoreceptors and ON-bipolar cells is confined to photoreceptors and that phosducin participates in the underlying molecular mechanism.