Ocular involvement in muscular dystrophy ranges from structural defects to abnormal electroretinograms. While the mechanisms underlying the abnormal retinal physiology in patients are not understood, it is thought that alpha-dystroglycan extracellular interactions are critical for normal visual function. Here we show that beta-dystroglycan anchors dystrophin and the inward rectifying K(+) channel Kir4.1 at glial endfeet and that disruption of dystrophin and potassium channel clustering in dystroglycan mutant mice is associated with an attenuation of the electroretinogram b-wave. Glial-specific inactivation of dystroglycan or deletion of the cytoplasmic domain of beta-dystroglycan was sufficient to attenuate the electroretinogram b-wave. Unexpectedly, deletion of the beta-dystroglycan cytoplasmic domain did not disrupt the laminar structure of the retina. In contrast to the role of alpha-dystroglycan extracellular interactions during early development of the CNS, beta-dystroglycan intracellular interactions are important for visual function but not the laminar development of the retina.