Limulus photoreceptors utilize the phosphoinositide pathway to generate light-induced single photon events (quantum bumps) that sum to form the depolarizing receptor potential. The protein kinase C (PKC) activator, (−)-indolactam V (ILV) rapidly desensitizes the light response in Limulus ventral nerve photoreceptors. Within 10 min of extracellular application, 100 nM (−)-ILV caused a decrease in the mean amplitude of quantum bumps to 38% of control values. PKC activation by (−)-ILV also causes photosensitive membrane disorganization and endocytosis. To investigate whether this precedes desensitization of the electrical response, we fixed cells after 10-min incubation with 25 μM (−)-ILV, a concentration sufficient to cause a 1000-fold desensitization of the receptor potential. The photosensitive microvilli of these photoreceptors remained narrow, densely packed, and well organized. Increasing the incubation time to 60 min did, however, induce disorganization and swelling of the microvilli and endocytosis of the photosensitive membrane, as previously reported. Measurement of membrane capacitance did not indicate a significant reduction in membrane area accompanying desensitization by (−)-ILV. PKC-induced reduction in light sensitivity therefore precedes the detection of ultrastructural changes in the rhabdomeral membrane and is not due to a net loss of membrane.