Mutations in human crumbs 1 (CRB1) are a major cause of retinal diseases that lead to blindness. CRB1 is a transmembrane protein found in the inner segment of photoreceptor cells (PRCs) and the apical membrane of Müller glia. The function of the extracellular region of CRB1 is poorly understood, although more than 80 disease-causing missense mutations have been mapped to it. We have recreated four of these mutations, affecting different extracellular domains, in Drosophila Crumbs (Crb). Crb regulates epithelial polarity and growth, and contributes to PRC differentiation and survival. The mutant Crb isoforms showed a remarkable diversity in protein abundance, subcellular distribution and ability to rescue the lack of endogenous Crb, elicit a gain-of-function phenotype or promote PRC degeneration. Interestingly, although expression of mutant isoforms led to a substantial rescue of the developmental defects seen in crb mutants, they accelerated PRC degeneration compared to that seen in retinas that lacked Crb, indicating that the function of Crb in cellular differentiation and cell survival depends on distinct molecular pathways. Several Crb mutant proteins accumulated abnormally in the rhabdomere and affected rhodopsin trafficking, suggesting that abnormal rhodopsin physiology contributes to Crb/CRB1-associated retinal degeneration.