Serotonin has important roles, both as a neurotransmitter and as a precursor for melatonin synthesis. In the vertebrate retina, the role and the localization of serotonin have been controversial. Studies examining serotonin immunoreactivity and uptake of radiolabeled serotonin have localized serotonin to inner retinal neurons, particularly populations of amacrine cells, and have proposed that these cells are the sites of serotonin synthesis. However, other reports identify other cells, such as bipolars and photoreceptors, as serotonergic neurons. Tryptophan hydroxylase (TPH), the rate-limiting enzyme in the serotonin synthetic pathway, was recently cloned from Xenopus laevis retina, providing a specific probe for localization of serotonin synthesis. Here we demonstrate that the majority of retinal mRNA encoding TPH is present in photoreceptor cells in Xenopus laevis retina. These cells also contain TPH enzyme activity. Therefore, in addition to being the site of melatonin synthesis, the photoreceptor cells also synthesize serotonin, providing a supply of the substrate needed for the production of melatonin.