The P2X7 receptor (P2X7-R) is expressed in the retina and brain and has been implicated in neurodegenerative diseases. However, whether it is expressed by neurons and plays a role as a neurotransmitter receptor has been the subject of controversy. In this study, we first show that the novel vesicular transporter for ATP, VNUT, is expressed in the retina, verifying the presence of the molecular machinery for ATP to act as neurotransmitter at P2X7-Rs. Secondly we show the presence of P2X7-R mRNA and protein in the retina and cortex and absence of the full length variant 1 of the receptor in the P2X7-R knock out (P2X7-KO) mouse. The role of the P2X7-R in neuronal function of the retina was assessed by comparing the electroretinogram response of P2X7-KO with WT mice. The rod photoreceptor response was found to be similar, while both rod and cone pathway post-photoreceptor responses were significantly larger in P2X7-KO mice. This suggests that activation of P2X7-Rs modulates output of second order retinal neurons. In line with this finding, P2X7-Rs were found in the outer plexiform layer and on inner retinal cell classes, including horizontal, amacrine and ganglion cells. The receptor co-localized with conventional synapses in the IPL and was expressed on amacrine cells post-synaptic to rod bipolar ribbon synapses. In view of the changes in visual function in the P2X7-KO mouse and the immunocytochemical location of the receptor in the normal retina, it is likely the P2X7-R provides excitatory input to photoreceptor terminals or to inhibitory cells that shape both the rod and cone pathway response.