Rhodopsin has been used as a prototype system to investigate G protein-coupled receptor (GPCR) internalization and endocytic sorting mechanisms. Failure of rhodopsin recycling upon light activation results in various degenerative retinal diseases. Accumulation of internalized rhodopsin in late endosomes and the impairment of its lysosomal degradation are associated with unregulated cell death that occurs in dystrophies. However, the molecular basis of rhodopsin accumulation remains elusive. We found that the novel norpAP24 suppressor, diehard4, is responsible for the inability of endo-lysosomal rhodopsin trafficking and retinal degeneration in Drosophila models of retinal dystrophies. We found that diehard4 encodes Osiris 21. Loss of its function suppresses retinal degeneration in norpAP24, rdgC306, and trp1, but not in rdgB2, suggesting a common cause of photoreceptor death. In addition, the loss of Osiris 21 function shifts the membrane balance between late endosomes and lysosomes as evidenced by smaller late endosomes and the proliferation of lysosomal compartments, thus facilitating the degradation of endocytosed rhodopsin. Our results demonstrate the existence of negative regulation in vesicular traffic between endosomes and lysosomes. We anticipate that the identification of additional components and an in-depth description of this specific molecular machinery will aid in therapeutic interventions of various retinal dystrophies and GPCR-related human diseases.