A breakdown in the blood-retinal barrier to certain proteins is described in mutant RCS rats with inherited retinal degeneration. Intravenously injected microperoxidase and horseradish peroxidase are extravasated from the outer (but not inner) retinal capillaries of these rats, at approximately 11 weeks of age and older. The number of affected capillaries increases with the age of the animals and progression of the retinal dystrophy until virtually all capillaries in the outer retina become permeable to these tracers. In such capillaries, enzyme reaction product is demonstrable in a greater proportion of luminal vesicles and in the majority of abluminal vesicles. Reaction product is also localized in cytoplasmic vacuoles, the basal laminae of endothelial cells and pericytes, and the perivascular spaces. The increased permeability of outer retinal capillaries in RCS rats appears to be due to an increase in transendothelial vesicular transport of the probe molecules. There was no evidence that either tracer permeated the interendothelial junctions or entered the basal laminae by reflux from the perivascular spaces. It is suggested that factors originating from the degenerated photoreceptor cells may play a role in stimulating the vesicular transport observed in permeable capillaries. In contrast to these findings, the outer retinal capillaries of RCS rats were not permeable to hemoglobin, catalase, or ferritin, regardless of the age of the animal or the degree of retinal degeneration. Since the vesicles that form at the luminal front are covered by a diaphragm, it is possible that this structure prevents entry of these larger proteins into the endothelial vesicle, even in capillaries that are demonstrably permeable to the smaller tracers.