Soluble enzymes, extracted from bovine retinal rod outer segments (ROS), were recombined with native ROS discs and discs which had been modified either by protease treatment or phosphorylation with rhodopsin kinase. The effect of these modifications on rhodopsin's ability to light-activate the ROS phosphodiesterase was determined. Trypsin, short-term thermolysin, and papain-digested discs were more effective in activating the phosphodiesterase than were undigested discs, whereas phosphorylated discs showed reduced ability to activate the phosphodiesterase. When a non-hydrolyzable analogue was employed in place of GTP in the assay, the same differences in the activation of phosphodiesterase as described above were observed between control discs and discs which were digested with thermolysin or phosphorylated. The proteolysis treatments remove various segments of amino acids from the carboxyl terminus of rhodopsin. In addition, at least seven phosphorylation sites are located in the terminal 15 amino acid residues of the carboxyl terminus of rhodopsin. Hence, it would appear from these studies that modifications of rhodopsin which affect the carboxyl terminus result in marked changes in the level of light-activatable phosphodiesterase activity, strongly suggesting a regulatory involvement in the light-activation process for this portion of rhodopsin.