There is a greatly thickened region of retina in the ventral part of the eye of the firefly squid Watasenia scintillans, with an outer segment (OS) layer around 600 µm thick. The distal two-thirds of this OS layer is yellow and contains a visual pigment, based on 4-hydroxyretinal (A4), with an absorbance maximum at 470 nm. The proximal third is pink and contains a visual pigment, based on dehydroretinal (A2), with an absorbance maximum at 500 nm. Light and electron microscopic investigations demonstrate the presence of four types of photoreceptor cell. In the pink layer, three of the four types (alpha, ß and gamma) produce no microvilli and are columnar in structure. These cells form square microvillous rhabdoms only in the distal yellow layer. The fourth cell type (delta) produces microvilli in the pink layer only. These observations led us to propose that the A2-based visual pigment is contained in the pink-layer cells and that the A4-based visual pigment is contained in the three types of yellow-layer cells. The absorbance of fresh retina was determined by microspectrophotometry. The yellow OS layer, with an absorbance of 0.7 per 100 µm thickness at 470 nm, is expected to act as a short-wavelength cut-off filter to the underlying pink OS cells, shifting their photosensitivity peak by an estimated 50 nm to 550 nm. Possible wavelength discrimination by this squid is discussed.