We studied phagocytosis of rod outer segments (ROS) by the retinal pigmented epithelium (RPE) using rapid freezing, freeze-drying, and electron microscopic immunocytochemistry. Phagocytosis of photoreceptor outer segment tips by the RPE occurs daily, and in rats the shedding of these tips is light-entrained to a circadian rhythm. We studied the phagocytic process 5, 30, 90, and 150 min after light onset or after subjective light onset in rats entrained to a 12-hr dark-12-hr light cycle. Lysosomes were labeled with antibodies to cathepsin D, a major lysosomal enzyme responsible for opsin degradation. Phagosomes and phagolysosomes were recognized because of the lamellar structure of their photoreceptor-derived contents. We found a population of lysosomes that fuse with one another before they interact with phagosomes. This fusion can be triggered either by light or by endogenous circadian mechanisms. We also found that lysosome-phagosome interaction occurs after the ingestion stage is completed and that this interaction occurs in two steps. First, smaller lysosomes fuse with phagosomes. Subsequently, larger lysosomes appear to interact with phagosomes via pore-like or bridge-like structures. It is proposed that interchange of contents takes place through these structures.