The prototypical transient receptor potential (TRP) channel is the major light-sensitive, and Ca(2+)-permeable channel in the microvillar photoreceptors of Drosophila. TRP channels are activated following hydrolysis of phosphatidylinositol 4,5-bisphosphate [PtdIns(4,5)P₂] by the key effector enzyme phospholipase C (PLC). Mutants lacking TRP channels undergo light-dependent retinal degeneration, as a consequence of the reduced Ca(2+) influx. It has been proposed that degeneration is caused by defects in the Ca(2+)-dependent visual pigment cycle, which result in accumulation of toxic phosphorylated metarhodopsin-arrestin complexes (MPP-Arr2). Here we show that two interventions, which prevent accumulation of MPP-Arr2, namely rearing under red light or eliminating the C-terminal rhodopsin phosphorylation sites, failed to rescue degeneration in trp mutants. Instead, degeneration in trp mutants reared under red light was rescued by mutation of PLC. Degeneration correlated closely with the light-induced depletion of PtdIns(4,5)P₂ that occurs in trp mutants due to failure of Ca(2+)-dependent inhibition of PLC. Severe retinal degeneration was also induced in the dark in otherwise wild-type flies by overexpression of a bacterial PtdInsPn phosphatase (SigD) to deplete PtdIns(4,5)P₂. In degenerating trp photoreceptors, phosphorylated Moesin, a PtdIns(4,5)P₂-regulated membrane-cytoskeleton linker essential for normal microvillar morphology, was found to delocalize from the rhabdomere and there was extensive microvillar actin depolymerisation. The results suggest that compromised light-induced Ca(2+) influx, due to loss of TRP channels, leads to PtdIns(4,5)P₂ depletion, resulting in dephosphorylation of Moesin, actin depolymerisation and disintegration of photoreceptor structure.