Mutations in the photoreceptor membrane guanylyl cyclase RetGC-1 have been linked to autosomal dominant cone-rod dystrophy. Three mutations were identified that alter strictly conserved residues within the RetGC-1 dimerization domain, a region predicted to form an amphipathic alpha-helical coil. Here we report on a biochemical characterization of one of the mutations, a substitution of cysteine for arginine at residue 838. We generated this mutation in vitro and measured its catalytic activity and sensitivity to guanylyl cyclase activating protein 1 (GCAP-1) and GCAP-2. The R838C substitution has several effects. It reduces the overall catalytic ability of RetGC-1 and dramatically reduces stimulation by GCAP-2, although GCAP-2 still appears to interact with the protein. The R838C substitution also increases the apparent affinity of RetGC-1 for GCAP-1 and alters the Ca(2+) sensitivity of the GCAP-1 response, allowing the mutant to be stimulated by GCAP-1 at higher Ca(2+) concentrations than wild type. The diminished response to GCAP-2, which we propose is not likely the cause of cone-rod degeneration in these patients, is interesting mechanistically because it separates the ability to bind a specific GCAP from the ability to be stimulated by it, and it also discriminates between the mechanisms of activation of GCAP-1 vs. GCAP-2. We suggest that the gain-of-function effects of R838C on RetGC-1 stimulated by GCAP-1, which are dominant in vitro and may cause an abnormal increase in cGMP synthesis in dark-adapted photoreceptors, may be the cause of the cone-rod degeneration.