Inactivation of photolyzed rhodopsin requires phosphorylation of the receptor and binding of the 48-kDa regulatory protein arrestin. We recently isolated a novel form of arrestin, termed p44, that is truncated at the COOH terminus (Palczewski, K., Buczylko, J., Ohguro, H., Annan, R. S., Carr, S. A., Crabb, J. W., Kaplan, M. W., Johnson, R. S., and Walsh, K. A. (1994) Protein Sci. 3, 319-329) and strongly inhibits Gt activation by non-phosphorylated rhodopsin. p44 is identical to arrestin except at the COOH terminus, where the 35 amino acids of arrestin are replaced by a single alanine residue. p44 is identified as a splice variant of arrestin based on the identical cDNA sequence of p44 with arrestin (except the 3' non-coding regions), the presence of an exon/intron junction at the Ser369 codon, and identical Southern hybridization patterns generated by the 3' non-coding portion of arrestin and p44. Immunocytochemistry reveals that p44 is localized in the photoreceptor outer segment, whereas arrestin is present throughout the cell. This specificity of localization to the outer segment is consistent with a role of p44 in the phototransduction cascade.