The ligand-binding property of a cytoplasmic membrane-bound protein from bovine retinal pigment epithelium (RPE) has been demonstrated. The putative RPE-retinal G protein coupled receptor (RGR) covalently binds both all-trans- and 11-cis-retinal after reduction by sodium borohydride. The 32-kDa receptor binds all-trans-retinal preferentially, rather than the 11-cis isomer. The amino acid sequence of the opsin-related protein in humans is 86% identical to that of bovine RGR, and a lysine residue, analogous to the retinaldehyde attachment site of rhodopsin, is conserved in the seventh transmembrane domain of RGR in both species. The human gene that encodes the novel retinaldehyde receptor spans 14.8 kb and is split into seven exons. The structure of the gene is distinct from that of the visual pigment genes. These findings support the notion that the rgr gene represents the earliest independent branch of the vertebrate opsin gene family. A second form of human RGR in retina is predicted by alternative splicing of its precursor mRNA. This RGR variant results from the alternative use of an internal acceptor splice site in the second intron of the human gene, and it contains an insertion of four amino acids in the connecting loop between the second and thrid transmembrane domains. Since RGR binds all-trans-retinal preferentially, one of its functions may be to catalyze isomerization of the chromophore by a retinochrome-like mechanism.