Cytoplasmic dynein 1 is fundamentally important for transporting a variety of essential cargoes along microtubules within eukaryotic cells. However, in mammals, few mutants are available for studying the effects of defects in dynein-controlled processes in the context of the whole organism. Here, we deleted mouse Dlic1 gene encoding DLIC1, a subunit of the dynein complex. Dlic1(-/-) mice are viable, but display severe photoreceptor degeneration. Ablation of Dlic1 results in ectopic accumulation of outer segment (OS) proteins, and impairs OS growth and ciliogenesis of photoreceptors by interfering with Rab11-vesicle trafficking and blocking efficient OS protein transport from Golgi to the basal body. Our studies show that Dlic1 deficiency partially blocks vesicle export from endoplasmic reticulum (ER), but seems not to affect vesicle transport from the ER to Golgi. Further mechanistic study reveals that lack of Dlic1 destabilizes dynein subunits and alters the normal subcellular distribution of dynein in photoreceptors, probably due to the impaired transport function of dynein. Our results demonstrate that Dlic1 plays important roles in ciliogenesis and protein transport to the OS, and is required for photoreceptor development and survival. The Dlic1(-/-) mice also provide a new mouse model to study human retinal degeneration.