Retinal degeneration in the mouse mutant, rd, was previously shown to be a disorder of cyclic nucleotide metabolism involving a deficiency in the activity of the rod photoreceptor cGMP phosphodiesterase (PDE). We have characterized the normal and rd PDE beta-subunit gene, and their respective transcripts, by PCR and direct sequence analysis. We show that the gene consists of at least 22 exons ranging in size from 48 base pairs to several hundred base pairs, covering greater than 25 kilobases. Within a 67-base-pair exon of the rd PDE beta-subunit gene, we identified a nonsense ochre mutation (a C----A transversion in codon 347) that truncates the normal gene product, eliminating more than one-half of the peptide chain, including the putative catalytic domain. The consequences of the truncation are consistent with the observed phenotypes in rd mice heterozygous and homozygous for the disorder. The nonsense mutation was also found in another related and in six unrelated strains displaying the rd phenotype, indicating that the rd allele arose from a single genetic event. The results strongly argue for the nonsense mutation being responsible for retinal degeneration in the rd mouse.