Primary cilia are key sensory organelles whose dysfunction leads to ciliopathy disorders such as Bardet-Biedl syndrome (BBS). Retinal degeneration is common in ciliopathies, since the outer segments (OSs) of photoreceptors are highly specialized primary cilia. BBS1, encoded by the most commonly mutated BBS-associated gene, is part of the BBSome protein complex. Using a bbs1 zebrafish mutant, we show that retinal development and photoreceptor differentiation are unaffected by Bbs1-loss, supported by an initially unaffected transcriptome. Quantitative proteomics and lipidomics on samples enriched for isolated OSs show that Bbs1 is required for BBSome-complex stability and that Bbs1-loss leads to accumulation of membrane-associated proteins in OSs, with enrichment in proteins involved in lipid homeostasis. Disruption of the tightly regulated OS lipid composition with increased OS cholesterol content are paralleled by early functional visual deficits, which precede progressive OS morphological anomalies. Our findings identify a role for Bbs1/BBSome in OS lipid homeostasis, suggesting a pathomechanism underlying retinal degeneration in BBS.