A homozygous mutation in STK38L in dogs impairs the late phase of photoreceptor development, and is followed by photoreceptor cell death (TUNEL) and proliferation (PCNA, PHH3) events that occur independently in different cells between 7–14 weeks of age. During this period, the outer nuclear layer (ONL) cell number is unchanged. The dividing cells are of photoreceptor origin, have rod opsin labeling, and do not label with markers specific for macrophages/microglia (CD18) or Müller cells (glutamine synthetase, PAX6). Nestin labeling is absent from the ONL although it labels the peripheral retina and ciliary marginal zone equally in normals and mutants. Cell proliferation is associated with increased cyclin A1 and LATS1 mRNA expression, but CRX protein expression is unchanged. Coincident with photoreceptor proliferation is a change in the photoreceptor population. Prior to cell death the photoreceptor mosaic is composed of L/M- and S-cones, and rods. After proliferation, both cone types remain, but the majority of rods are now hybrid photoreceptors that express rod opsin and, to a lesser extent, cone S-opsin, and lack NR2E3 expression. The hybrid photoreceptors renew their outer segments diffusely, a characteristic of cones. The results indicate the capacity for terminally differentiated, albeit mutant, photoreceptors to divide with mutations in this novel retinal degeneration gene.