Photoreceptor cell death and inflammation are known to occur progressively in retinal degenerative diseases such as age-related macular degeneration (AMD). However, the molecular mechanisms underlying these biological processes are largely unknown. Extracellular vesicles (EV) are essential mediators of cell-to-cell communication with emerging roles in the modulation of immune responses. EVs, including exosomes, encapsulate and transfer microRNA (miRNA) to recipient cells and in this way can modulate the environment of recipient cells. Dysregulation of EVs however is correlated to a loss of cellular homeostasis and increased inflammation. In this work we investigated the role of isolated retinal small-medium sized EV (s-mEV) which includes exosomes in both the healthy and degenerating retina. Isolated s-mEV from normal retinas were characterized using dynamic light scattering, transmission electron microscopy and western blotting, and quantified across 5 days of photo-oxidative damage-induced degeneration using nanotracking analysis. Small RNAseq was used to characterize the miRNA cargo of retinal s-mEV isolated from healthy and damaged retinas. Finally, the effect of exosome inhibition on cell-to-cell miRNA transfer and immune modulation was conducted using systemic daily administration of exosome inhibitor GW4869 and hybridization of s-mEV-abundant miRNA, miR-124-3p. Electroretinography and immunohistochemistry was performed to assess functional and morphological changes to the retina as a result of GW4869-induced exosome depletion. Results demonstrated an inverse correlation between s-mEV concentration and photoreceptor survivability, with a decrease in s-mEV numbers following degeneration. Small RNAseq revealed that s-mEVs contained uniquely enriched miRNAs in comparison to in whole retinal tissue, however, there was no differential change in the s-mEV miRNAnome following photo-oxidative damage. Exosome inhibition via the use of GW4869 was also found to exacerbate retinal degeneration, with reduced retinal function and increased levels of inflammation and cell death demonstrated following photo-oxidative damage in exosome-inhibited mice. Further, GW4869-treated mice displayed impaired translocation of photoreceptor-derived miR-124-3p to the inner retina during damage. Taken together, we propose that retinal s-mEV and their miRNA cargo play an essential role in maintaining retinal homeostasis through immune-modulation, and have the potential to be used in targeted gene therapy for retinal degenerative diseases.