Palmitoylation is a reversible, post-translational modification observed in a number of G-protein-coupled receptors. To gain a better understanding of its role in visual transduction, we produced transgenic knock-in mice that expressed a palmitoylation-deficient rhodopsin (Palm(-/-)). The mutant rhodopsin was expressed at wild-type levels and showed normal cellular localization to rod outer segments, indicating that neither rhodopsin stability nor its intracellular trafficking were compromised. But Palm(-/-) rods had briefer flash responses and reduced sensitivity to flashes and to steps of light. Upon exposure to light, rhodopsin became phosphorylated at a faster rate in mutant than in wild-type retinas. Since quench of rhodopsin begins with its phosphorylation, these results suggest that palmitoylation may modulate rod photoreceptor sensitivity by permitting rhodopsin to remain active for a longer period.