OBJECTIVE To examine the ultrastructure of the rd retina after transplantation of small micro-aggregates of neural retina in order to determine their survival and integration with the host retina and for sites of communication between transplant and host neurons. METHODS Neonatal micro-aggregates from transgenic mice expressing a LacZ gene reporter gene in their rods were transplanted into the subretinal space of transgenic rd mice expressing a LacZ reporter gene in their rod bipolar cells. The mice were killed at various times after transplantation surgery and studied by light and electron microscopy. RESULTS Retinal transplants survived well, as long as 8 months, without signs of rejection and were well integrated into the host retina. Cell bodies of transplanted rods made membrane-to-membrane contacts with rod bipolar cells of the host at areas where there were gaps in the host external plexiform layer. One synaptic process of a transplanted rod was found on the vitreal side of the host's external limiting membrane. In two cases, a postsynaptic process in a transplanted rod spherule contained an Xgal label, implying that it belonged to a host rod bipolar. There was evidence of extension of processes between host and transplant retinas involving astrocytic rather than neural structures. CONCLUSIONS Retinal allografts to the subretinal space of rd mice survive indefinitely. Close but non-synaptic contacts occur between transplant and host neurons that could allow ephaptic communication between these two retinas. Evidence of synaptic contacts between transplant and host was difficult to find.