Age-related macular degeneration (AMD) is a devastating neurodegenerative disease and a major cause of blindness in the developed world. Owing to its complexity and the lack of an adequate human model that recapitulates key aspects of the disease, the molecular mechanisms of AMD pathogenesis remain poorly understood. Here we show that cultured human retinal pigment epithelium (RPE) from AMD donors (AMD RPE) are functionally impaired and exhibit distinct phenotypes compared with RPE cultured from normal donors (normal RPE). Accumulation of lipid droplets and glycogen granules, disintegration of mitochondria, and an increase in autophagosomes were observed in AMD RPE cultures. Compared with normal RPE, AMD RPE exhibit increased susceptibility to oxidative stress, produce higher levels of reactive oxygen species (ROS) under stress conditions, and showed reduced mitochondrial activity. Measurement of the ratio of LC3-II/ LC3-I, revealed impaired autophagy in AMD RPE as compared with normal RPE. Autophagic flux was also reduced in AMD RPE as compared with normal RPE, as shown by inability of AMD RPE to downregulate p62 levels during starvation. Impaired autophagic pathways were further shown by analyzing late autophagic vesicles; immunostaining with lysosome-associated membrane protein 1 (LAMP-1) antibody revealed enlarged and annular LAMP-1-positive organelles in AMD RPE as opposed to smaller discrete puncta observed in normal RPE. Our study provides insights into AMD cellular and molecular mechanisms, proposes dysfunctional autophagy as an underlying mechanism contributing to the pathophysiology of the disease, and opens up new avenues for development of novel treatment strategies.