Most of the blinding retinopathies are due to progressive photoreceptor degeneration. Treatment paradigms that are currently being investigated include strategies to either halt or slow down photoreceptor cell loss, or to replace useful vision with retinal prosthesis. However, more information is required on the pathophysiological changes of the diseased retina, in particular the inner retina, that occur as a consequence of photoreceptor cell loss. Here we wished to use light damage as a stoppable insult to determine the structural and functional consequences on inner and outer retina, with the overall goal of determining whether survival of a functional inner retina is possible even if the outer retina is damaged. Mice were exposed to a 20-day light-damage period. Electroretinograms (ERG) and morphology were used to assess subsequent recovery. Outer retina was monitored analyzinga-waves, which represent photoreceptor cell responses, and histology. Integrity of the inner retina was monitored, analyzingb-waves and oscillatory potentials (OP1–OP4) and immunohistochemical markers for known proteins of the inner retina. All six ERG components were significantly suppressed with respect to amplitudes and kinetics, but stabilized in a wave-dependent manner within 40–70 days after the end of light exposure. As expected, damage of the outer retina was permanent. However, function of the inner retina was found to recover significantly. Whileb-wave amplitudes remained suppressed to 60% of their baseline values, OP amplitudes recovered completely, and implicit times of all components of the inner retina (b-wave and OP1–OP4) recovered to a level close to baseline values. Histological analyses confirmed the lack of permanent damage to the inner retina. In summary, these data suggests that the inner retina has the potential for significant recovery as well as plasticity if treatment is available to stop the deterioration of the outer retina.