A GABA- or glycine-induced increase in Cl− permeability can produce either a depolarization or hyperpolarization, depending on the Cl− equilibrium potential. It has been shown that retinal neurons express the chloride cotransporters, Na-K-2Cl (NKCC) and K-Cl (KCC), the primary molecular mechanisms that control the intracellular Cl− concentration. We thus studied (1) the localization of these cotransporters in the fish retina, and (2) how suppression of cotransporter activity in the fish retina affects function. Specific antibodies against NKCC and KCC2 revealed that both cotransporters were expressed in the outer and inner plexiform layers, and colocalized in many putative amacrine cells and in cells of the ganglion cell layer. However, the somata of putative horizontal cells displayed only NKCC immunoreactivity and many bipolar cells were only immunopositive for KCC2. In the outer retina, application of bumetanide, a specific inhibitor of NKCC activity, (1) increased the steady-state extracellular concentration of K+ ([K+]o) and enhanced the light-induced decrease in the [K+]o, (2) increased the sPIII photoreceptor-dependent component of the ERG, and (3) reduced the extracellular space volume. In contrast, in the outer retina, application of furosemide, a specific inhibitor of KCC activity, decreased sPIII and the light-induced reduction in [K+]o, but had little effect on steady-state [K+]o. In the inner retina, bumetanide increased the sustained component of the light-induced increase in [K+]o. These findings thus indicate that NKCC and KCC2 control the [K+]o and extracellular space volume in the retina in addition to regulating GABA- and glycine-mediated synaptic transmission. In addition, the anatomical and electrophysiological results together suggest that all of the major neuronal types in the fish retina are influenced by chloride cotransporter activity.