Blinding diseases can be assigned predominantly to genetic defects of the photoreceptor/pigmented epithelium complex. As an alternative, we show here for an acetylcholinesterase (AChE) knockout mouse that photoreceptor degeneration follows an impaired development of the inner retina. During the first 15 postnatal days of the AChE–/– retina, three major calretinin sublaminae of the inner plexiform layer (IPL) are disturbed. Thereby, processes of amacrine and ganglion cells diffusely criss-cross throughout the IPL. In contrast, parvalbumin cells present a nonlaminar IPL pattern in the wild-type, but in the AChE–/– mouse their processes become structured within two ‘novel’ sublaminae. During this early period, photoreceptors become arranged regularly and at a normal rate in the AChE–/– retina. However, during the following 75 days, first their outer segments, and then the entire photoreceptor layer completely degenerate by apoptosis. Eventually, cells of the inner retina also undergo apoptosis. As butyrylcholinesterase (BChE) is present at a normal level in the AChE–/– mouse, the observed effects must be solely due to the missing AChE. These are the first in vivo findings to show a decisive role for AChE in the formation of the inner retinal network, which, when absent, ultimately results in photoreceptor degeneration.