Invertebrate visual signal transduction involves photoisomerization of rhodopsin, activating a guanine nucleotide binding protein (G protein) of the G(q) class, iG(q), which stimulates a phospholipase C, increasing intracellular Ca2+. Arrestin binding to photoactivated rhodopsin is a key mechanism of desensitization. We have previously reported the cloning of a retina-specific arrestin cDNA from Loligo pealei displaying 56-64% sequence similarity to other reported arrestin sequences. Here, we report the purification of the 55-kDa squid visual arrestin. Purified squid visual arrestin is able to inhibit light-activated GTPase activity dose-dependently in arrestin-depleted rhabdomeric membranes and associate with the membrane in a light-dependent manner. Membrane association can be partially inhibited by inositol 1,2,3,4,5,6-hexakisphosphate (IP6), a soluble analog of the membrane lipid phosphatidylinositol 3,4,5-triphosphate. In reconstitution assays, we demonstrate arrestin phosphorylation by squid rhodopsin kinase, a novel function among the G protein-coupled receptor kinase family. Phosphorylation of purified arrestin requires squid rhodopsin kinase, membranes, light-activation, and the presence of Ca2+. This is the first large-scale purification of an invertebrate arrestin and biochemical demonstration of arrestin function in the invertebrate visual system.