Pre-clinical studies provided evidence for successful photoreceptor cell replacement therapy. Migration and integration of donor photoreceptors into the retina has been proposed as the underlying mechanism for restored visual function. Here we reveal that donor photoreceptors do not structurally integrate into the retinal tissue but instead reside between the photoreceptor layer and the retinal pigment epithelium, the so-called sub-retinal space, and exchange intracellular material with host photoreceptors. By combining single-cell analysis, Cre/lox technology and independent labelling of the cytoplasm and nucleus, we reliably track allogeneic transplants demonstrating cellular content transfer between graft and host photoreceptors without nuclear translocation. Our results contradict the common view that transplanted photoreceptors migrate and integrate into the photoreceptor layer of recipients and therefore imply a re-interpretation of previous photoreceptor transplantation studies. Furthermore, the observed interaction of donor with host photoreceptors may represent an unexpected mechanism for the treatment of blinding diseases in future cell therapy approaches.