Animals detect light using opsin photopigments. Xenopsin, a recently classified subtype of opsin, challenges our views on opsin and photoreceptor evolution. Originally thought to belong to the Gαi-coupled ciliary opsins, xenopsins are now understood to have diverged from ciliary opsins in pre-bilaterian times, but little is known about the cells that deploy these proteins, or if they form a photopigment and drive phototransduction. We characterized xenopsin in a flatworm, Maritigrella crozieri, and found it expressed in ciliary cells of eyes in the larva, and in extraocular cells around the brain in the adult. These extraocular cells house hundreds of cilia in an intra-cellular vacuole (phaosome). Functional assays in human cells show Maritigrella xenopsin drives phototransduction primarily by coupling to Gαi. These findings highlight similarities between xenopsin and c-opsin and reveal a novel type of opsin-expressing cell that, like jawed vertebrate rods, encloses the ciliary membrane within their own plasma membrane.