The distribution of cyclic 3',5'-nucleotide phosphodiesterase activity was determined in photoreceptor cells of the fly Calliphora erythrocephala. With cAMP as substrate, staining was most intense within the phototransducing region of these cells, the rhabdomeral microvilli and also in the extracellular space surrounding the microvilli and in the mitochondria. With cGMP as substrate, the intensity within the rhabdomeres was less marked, while their extracellular surroundings were stained heavily. Thus, compared to cGMP, cAMP is the better substrate for the phosphodiesterase in the rhabdomeres of the fly. For comparison, the same cytochemical method was used to localize the well-known phosphodiesterase activity in retinal tissue of the mouse. Under the same conditions as used for fly photoreceptors, a very intense reaction product was obtained in rod outer segments. With regard to the conflicting reports concerning the light-stimulated changes of cyclic nucleotides in invertebrate photoreceptor cells, the results presented here further argue for an important role of a cyclic nucleotide in the process of phototransduction of invertebrates.