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Rod outer segment (OS) morphogenesis involves assembly of flattened discs circumscribed by a hairpin-like rim, however, the role of the rim and rim proteins such as retinal degeneration slow (RDS) and its homologue rod OS membrane protein-1 (ROM-1) in this process remains unclear. Here we show that without RDS, no disc/OS formation occurs, while without rhodopsin, small OS structures form containing aligned nascent discs. In the absence of both rhodopsin and RDS, RDS-associated degeneration is slowed, and ROM-1 is stabilized and trafficked to the OS. These animals (rho-/-/rds-/-) exhibit OSs slightly better than those lacking only RDS, but still without signs of disc formation. These results clearly demonstrate that OS morphogenesis is initiated by RDS-mediated rim formation, a process ROM-1 cannot recapitulate, with subsequent disc growth mediated by rhodopsin. The critical role of RDS in this process helps explain why photoreceptors are so sensitive to varied RDS levels, and why mutations in RDS cause debilitating retinal disease.