The aim of this study was to determine whether retinal progenitor layer transplants form synaptic connections with the host and restore vision. Donor retinal sheets, isolated from embryonic day 19 rat fetuses expressing human placental alkaline phosphatase (hPAP), were transplanted to the subretinal space of 18 S334ter-3 rats with fast retinal degeneration at the age of 0.8–1.3 months. Recipients were killed at the age of 1.6–11.8 months. Frozen sections were analysed by confocal immunohistochemistry for the donor cell label hPAP and synaptic markers. Vibratome slices were stained for hPAP, and processed for electron microscopy. Visual responses were recorded by electrophysiology from the superior colliculus (SC) in 12 rats at the age of 5.3–11.8 months. All recorded transplanted rats had restored or preserved visual responses in the SC corresponding to the transplant location in the retina, with thresholds between −2.8 and −3.4 log cd/m2. No such responses were found in age-matched S334ter-3 rats without transplants, or in those with sham surgery. Donor cells and processes were identified in the host by light and electron microscopy. Transplant processes penetrated the inner host retina in spite of occasional glial barriers between transplant and host. Labeled neuronal processes were found in the host inner plexiform layer, and formed apparent synapses with unlabeled cells, presumably of host origin. In conclusion, synaptic connections between graft and host cells, together with visual responses from corresponding locations in the brain, support the hypothesis that functional connections develop following transplantation of retinal layers into rodent models of retinal degeneration.