The electrical response to light in retinal rods is mediated by cyclic nucleotide-gated, nonselective cation channels in the outer segment plasma membrane. Although cGMP appears to be the primary light-regulated second messenger, cellular levels of other substances, including Ca2+ and phosphatidylinositol-4,5-bisphosphate, are also sensitive to the level of illumination. We now show that diacylglycerol (DAG) analogs reversibly suppress the cGMP-activated conductance in excised patches from frog rod outer segments. This suppression did not require nucleoside triphosphates, indicating that a phosphorylation reaction was not involved. DAG was more effective at low than at high [cGMP]: with 50 microM 8-Br-cGMP, the DAG analog 1,2-dioctanoyl-sn-glycerol (1,2-DiC8) reduced the current with an IC50 of approximately 22 microM (Hill coefficient, 0.8), whereas with 1.2 microM 8-Br-cGMP, only approximately 1 microM 1,2-DiC8 was required to halve the current. DAG reduced the apparent affinity of the channels for cGMP: 4 microM 1,2-DiC8 produced a threefold increase in the K1/2 for channel activation by 8-Br-cGMP, as well as a threefold reduction in the maximum current, without changing the apparent stoichiometry or cooperativity of cGMP binding. Inhibition by 1,2-DiC8 was not relieved by supersaturating concentrations of 8-Br-cGMP, suggesting that DAG did not act by competitive inhibition of cGMP binding. Furthermore, DAG did not seem to significantly reduce single-channel conductance. A DAG analog similar to 1,2-DiC8--1,3-dioctanoyl-sn-glycerol (1,3-DiC8)--suppressed the current with the same potency as 1,2-DiC8, whereas an ethylene glycol of identical chain length (DiC8-EG) was much less effective. Our results suggest that DAG allosterically interferes with channel opening, and raise the question of whether DAG is involved in visual transduction.