Complex alterations in the anatomy of outer retinal pathways accompany photoreceptor degeneration in the rd1 mouse model of retinitis pigmentosa, whereas inner retinal neurons appear relatively preserved. However, the progressive loss of photoreceptor input likely alters the neural circuitry of the inner retina. This study investigated resulting changes in the activity of surviving ganglion cells. Multielectrode recording monitored spontaneous and light-evoked extracellular action potentials simultaneously from 30 to 90 retinal ganglion cells of wild-type (wt) or rd1 mice. In rd1 mice, this activity evolves through three phases. First, normal spontaneous “waves” of correlated firing are seen at postnatal day 7 (P7) and last until shortly after eye opening. Second, at P14, full-field light flashes evoke reliable responses in many cells, with preferential preservation of off responses. These diminish as photoreceptor degeneration progresses. Third, once light-evoked responses have disappeared in early adulthood, surviving rd1 ganglion cells fire at a much higher spontaneous frequency than normal, sometimes in rhythmic bursts that are distinct from the developmental “waves.” This hyperactivity is sustained well into adulthood, for weeks after photoreceptors have disappeared. Thus striking alterations occur in inner retinal physiology as retinal degeneration progresses in the rd1 mouse. Blindness occurs in the face of sustained hyperactivity among ganglion cells, which remain viable for months despite this activity. On and off responses are differentially affected in early stages of degeneration. While the source of these changes remains to be learned, such features should be considered in designing more effective treatments for these disorders.