A study of the photo-oxidation of films of poly[2-methoxy-5-(3′, 7′-dimethyloctyloxy)-1,4-phenylene vinylene] (MDMO-PPV) blended with [6,6]-phenyl C61-butyric acid methyl ester (PCBM), and solar cells based thereon, is presented. Solar-cell performance is degraded primarily through loss in short-circuit current density, JSC. The effect of the same photodegradation treatment on the optical-absorption, charge- recombination, and charge-transport properties of the active layer is studied. It is concluded that the loss in JSC is primarily due to a reduction in charge-carrier mobility, owing to the creation of more deep traps in the polymer during photo-oxidation. Recombination is slowed down by the degradation and cannot therefore explain the loss in photocurrent. Optical absorption is reduced by photo-bleaching, but the size of this effect alone is insufficient to explain the loss in device photocurrent. © 2006 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim.