Photoreceptor membranes derived from isolated bovine rod outer segments, are subjected to treatment with phospholipase C (Bacillus cereus). This results in varying degrees of hydrolysis of the membrane phospholipids into diglycerides and water soluble phosphate esters without loss of rhodopsin. Electron microscopic observations of thin sections and freeze-fractured preparations indicate extrusion of diglycerides from the membranes and their coalescence to lipid droplets, beginning at 20% hydrolysis of phospholipids. After 90% hydrolysis of phospholipids membranous structures are still present. The rhodopsin is located in these structures, presumably in the form of two-dimensional lateral aggregates. This explains the cross-fracturing of the membranous structures, regularly observed upon freeze-fracturing of the phospholipase-treated photoreceptor membranes.