The cellular mechanisms underlying feedback signaling from horizontal cells to photoreceptors, which are important for the formation of receptive field surrounds of early visual neurons, remain unsettled. Mammalian horizontal cells express a complement of synaptic proteins that are necessary and sufficient for calcium-dependent exocytosis of inhibitory neurotransmitters at their contacts with photoreceptor terminals, suggesting that they are capable of releasing GABA via vesicular release. To test whether horizontal cell vesicular release is involved in feedback signaling, we perturbed inhibitory neurotransmission in these cells by targeted deletion of the vesicular GABA transporter (VGAT), the protein responsible for the uptake of inhibitory transmitter by synaptic vesicles. To manipulate horizontal cells selectively, an iCre mouse line with Cre recombinase expression controlled by connexin57 (Cx57) regulatory elements was generated. In Cx57-iCre mouse retina, only horizontal cells expressed Cre protein, and its expression occurred in all retinal regions. After crossing with a VGAT(flox/flox) mouse line, VGAT was selectively eliminated from horizontal cells, which was confirmed immunohistochemically. Voltage-gated ion channel currents in horizontal cells of Cx57-VGAT(-/-) mice were the same as Cx57-VGAT(+/+) controls, as were the cell responses to the ionotropic glutamate receptor agonist kainate, but the response to the GABAA receptor agonist muscimol in Cx57-VGAT(-/-) mice was larger. In contrast, the feedback inhibition of photoreceptor calcium channels, which in control animals is induced by horizontal cell depolarization, was completely absent in Cx57-VGAT(-/-) mice. The results suggest that vesicular release of GABA from horizontal cells is required for feedback inhibition of photoreceptors.