The membrane-associated palmitoylated protein 5 (MPP5 or PALS1) is thought to organize intracellular PALS1-CRB-MUPP1 protein scaffolds in the retina that are involved in maintenance of photoreceptor-Müller glia cell adhesion. In humans, the Crumbs homolog 1 (CRB1) gene is mutated in progressive types of autosomal recessive retinitis pigmentosa and Leber congenital amaurosis. However, there is no clear genotype-phenotype correlation for CRB1 mutations, which suggests that other components of the CRB complex may influence the severity of retinal disease. Therefore, to understand the physiological role of the Crumbs complex proteins, especially PALS1, we generated and analyzed conditional knockdown mice for Pals1. Small irregularly shaped spots were detected throughout the PALS1 deficient retina by confocal scanning laser ophthalmoscopy and spectral domain optical coherence tomography. The electroretinography a- and b-wave was severely attenuated in the aged mutant retinas, suggesting progressive degeneration of photoreceptors. The histological analysis showed abnormal retinal pigment epithelium structure, ectopic photoreceptor nuclei in the subretinal space, an irregular outer limiting membrane, half rosettes of photoreceptors in the outer plexiform layer, and a thinner photoreceptor synaptic layer suggesting improper photoreceptor cell layering during retinal development. The PALS1 deficient retinas showed reduced levels of Crumbs complex proteins adjacent to adherens junctions, upregulation of glial fibrillary acidic protein indicative of gliosis, and persisting programmed cell death after retinal maturation. The phenotype suggests important functions of PALS1 in the retinal pigment epithelium in addition to the neural retina.