As a part of the retina, the bipolar cell exists between photoreceptors (rod cells and cone cells) and ganglion cells.

Bipolar cells are so-named as they have a central body from which two sets of processes arise. At one end, they form synapses with either a single cone cell, or a number of rod cells. At the other end, they form synapses with ganglion cells. Bipolar cells transfer information from rods and cones to ganglion cells.

They can be categorized into two different groups, ON and OFF, according to how they react to glutamate produced by photoreceptor cells. When light hits a photoreceptor cell, its glutamate production decreases. An ON-cell will react to this by depolarizing. An OFF-cell will depolarize when glutamate production increases(when light power decreases).