Retinal degeneration slow (RDS/PRPH2) is critical for the formation of the disc/lamella rim in photoreceptor outer segments (OSs), but plays a different role in rods vs. cones. Without RDS, rods fail to form OSs, however, cones lacking RDS (in the rds(-/-)/Nrl(-/-)) exhibit balloon-like OSs devoid of lamellae. We show that distribution of most proteins in the lamella and PM domains is preserved even in the absence of RDS, rim, and lamella structures. However, the rim protein prominin-1 exhibits altered trafficking and OS localization, suggesting that proper targeting and distribution of rim proteins may require RDS. Our ultrastructural studies show that in cones, OS formation is initiated by the growth of opsin-containing membrane with RDS-mediated rim formation as a secondary step. This is directly opposite to rods and significantly advances our understanding of the role of the rim in cone OS morphogenesis. Furthermore, our results suggest that the unique folded lamella architecture of the cone OS may maximize density or proximity of phototransduction proteins, but is not required for OS function or for protein distribution and retention in different membrane domains.