Invertebrate phototransduction is believed to involve an inositol trisphosphate (InsP3)-mediated release of calcium from intracellular storage compartments. Although light-induced production of InsP3 has been demonstrated for squid retinas, morphological evidence for the presence of internal calcium stores has been lacking. Because squid retinas are about 1 mm thick and composed of densely packed receptor cells, conventional aldehyde fixatives may not penetrate rapidly enough to preserve subcellular organelles. To reduce the time for fixative penetration, receptor cells were isolated from intact retinas before fixation, but these techniques provided little improvement in the preservation of membrane-bound compartments. Alternatively, the distal ends of the receptors were ultra-rapidly frozen by dropping 1 mm2 pieces of intact retina against a liquid helium-cooled copper block. Electron micrographs of thick sections from rapidly frozen and freeze- substituted retinas showed elongated saccules oriented parallel to the long axis of the receptor cell and located about 40 nm from the microvillar openings. Freeze-fracture and etch views of rapidly frozen cells showed that the saccules are 130 nm diameter tubules and extend for at least several micrometers along the length of the receptor cell. We call these organelles submicrovillar tubules (SMT). The gap between the SMT and the plasma membrane contains a network of filaments that appear to be actin. Freeze-fracture and etch views of the rhabdomeres also indicate that adjacent microvilli are separated by a 6–8-nm-wide extracellular space along most of their length. This space is spanned by extracellular connections linking adjacent microvilli. The position and orientation of the SMT suggest that these organelles may serve the same function as the more voluminous and highly convoluted submicrovillar cisternae found in other invertebrates. The SMT is likely to be the intracellular compartment that stores and releases calcium as part of the InsP3-mediated light response.