There are concomitant morphological and functional changes in the inner retina during the course of photoreceptor degeneration in a range of animal models of retina degeneration and in humans with eye disease. One concern that has been raised is that the changes occurring in the inner retina might compromise attempts to rescue or restore visual input by various interventional approaches. It is known that cell-based therapy can preserve significant visual capability for many months. In this study, we examine the overall changes in the Royal College of Surgeons (RCS) rat during degeneration and the effects of cell transplantation by means of immunohistochemistry and confocal microscopy. The degenerative changes are complex, and they progress with age. They involve the neurons with which both rods and cones interconnect—retinal second- and third-order neurons underwent dramatic modification, including sprouting, retraction as photoreceptor loss progressed—as well as Müller glia and secondary vascular changes, which were associated at later times with neuronal migration. The pathological vascular changes led to major disruption of inner retina. After introducing a retinal pigment epithelial cell line to the subretinal space early in the progress of photoreceptor degeneration, most inner retinal changes were held in abeyance for up to at least 10 months of age. Given the concern that has been raised regarding whether inner retinal changes might compromise any graft-related benefit, this is an encouraging finding. J. Comp. Neurol. 491:400–417, 2005. © 2005 Wiley-Liss, Inc.