ABCR is a photoreceptor-specific ATP-binding cassette transporter that has been linked to various retinal diseases, including Stargardt macular dystrophy, and implicated in retinal transport across rod outer segment (ROS) membranes, We have examined the ATPase and GTPase activity of detergent-solubilized and reconstituted ABCR, 3-[(3-Cholamidopropyl)dimethylammonio]-1-propanesulfonic acid-solubilized ABCR had ATPase and GTPase activity (K-m similar to 75 mu M; V-max similar to 200 nmol/min/mg) that was stimulated 1.5-2-fold by all-trans-retinal and dependent on phospholipid and dithiothreitol. The K-m for ATP decreased to similar to 25 mu M after reconstitution, whereas the V-max was strongly dependent on the lipid used for reconstitution. ABCR reconstituted in ROS phospholipid had a V-max for basal and retinal activated ATPase activity that was 4-6 times higher than for ABCR in soybean or brain phospholipid. This enhanced activity was mainly due to the high phosphatidylethanolamine (PE) content of ROS membranes. PE was also required for retinoid-stimulated ATPase activity. ATPase activity of ABCR was stimulated by the addition of N-retinylidene-PE but not the reduced derivative, retinyl-PE. ABCR expressed in COS-1 cells also exhibited retinal-stimulated ATPase activity similar to that of the native protein, These results support the view that ABCR is an active retinoid transporter, the nucleotidase activity of which is strongly influenced by its lipid environment.