Rab5 small GTPase is a famous regulator of endocytic vesicular transport from plasma membrane to early endosomes. In neurons, Rab5 is found not only on endocytic vesicles in cell bodies but also on synaptic vesicles in nerve terminals. However, the function of Rab5 on synaptic vesicles remains unclear. Here, we elucidate the function of Rab5 on synaptic vesicles with in vivo and in vitro experiments using Drosophila photoreceptor cells. Functional inhibition of Rab5 with Rab5N142I, a dominant negative version of Drosophila Rab5, induced enlargement of synaptic vesicles. This enlargement was, however, suppressed by enhancing synaptic vesicle recycling under light illumination. In addition, synaptic vesicles prepared from Rab5N142I-expressing flies exhibited homotypic fusion in vitro. These results indicate that Rab5 functions to keep the size of synaptic vesicles uniform by preventing their homotypic fusion. By contrast, Rab5 was not involved in the endocytic reformation of synaptic vesicles, contrary to expectation from its conventional function. Furthermore, we electrophysiologically and behaviourally showed that the function of Rab5 is essential for efficient signal transmission across synapses.