Arrestins have been implicated in the regulation of many G protein-coupled receptor signaling cascades. Mutations in two Drosophila photoreceptor-specific arrestin genes, arrestin 1 and arrestin 2, were generated. Analysis of the light response in these mutants shows that the Arr1 and Arr2 proteins are mediators of rhodopsin inactivation and are essential for the termination of the phototransduction cascade in vivo. The saturation of arrestin function by an excess of activated rhodopsin is responsible for a continuously activated state of the photoreceptors known as the prolonged depolarized afterpotential. In the absence of arrestins, photoreceptors undergo light-dependent retinal degeneration as a result of the continued activity of the phototransduction cascade. These results demonstrate the fundamental requirement for members of the arrestin protein family in the regulation of G protein-coupled receptors and signaling cascades in vivo.