To gain insight into mechanisms involved in photoreceptor development, we characterized a zebrafish mutation in the mikre oko locus that produces early loss of photoreceptor cells. mikre oko photoreceptors lose their elongated morphology at the time of wild-type outer segment formation and undergo cell death within a few days. To investigate whether this phenotype involves cell-cell interaction defects, we performed analysis of genetically mosaic animals. Interactions of mikre oko photoreceptors with wild-type cells rescue several aspects of the mutant phenotype. When placed in a wild-type environment, mikre oko photoreceptor cells retain elongated morphology and survive longer. Moreover, although mutant mikre oko photoreceptor outer segments develop only infrequently and are usually disorganized, mikre oko cone and rod cells in mosaic retinas develop robust outer segments that closely resemble the wild type. In contrast to the outer segments, the proximal regions of mikre oko photoreceptor cells, including their inner segments, the nuclear regions, and the synaptic termini, retain the mutant appearance. mikre oko outer segment rescue is not mediated by interactions with the retinal pigment epithelium. These studies demonstrate that the differentiation of outer segments is surprisingly independent from the more proximal photoreceptor cell features and that outer segment development includes retinal pigment epithelium-independent cell-cell interactions.