Impaired cargo trafficking and the aggregation of intracellular macromolecules are key features of neurodegeneration, and a hallmark of aged as well as diseased retinal pigment epithelial (RPE) cells in the eye. Here, photoreceptor outer segments (POS), which are internalized daily by RPE cells, were modified by UV-irradiation to create oxidatively modified POS (OxPOS). Oxidative modification was quantified by a protein carbonyl content assay. Human ARPE-19 cells were synchronously pulsed with POS or OxPOS to study whether oxidatively modified cargos can recapitulate features of RPE pathology associated with blinding diseases. Confocal immunofluorescence microscopy analysis showed that OxPOS was trafficked to LAMP1, LAMP2 lysosomes and to LC3b autophagy vacuoles. Whilst POS were eventually degraded, OxPOS cargos were sequestered in late compartments. Co-localization of OxPOS was also associated with swollen autolysosomes. Ultrastructural analysis revealed the presence of electron-dense OxPOS aggregates in RPE cells, which appeared to be largely resistant to degradation. Measurement of cellular autofluorescence, using parameters used to assess fundus autofluorescence (FAF) in age-related macular disease (AMD) patients, revealed that OxPOS contributed significantly to a key feature of aged and diseased RPE. This in vitro cell model therefore represents a versatile tool to study disease pathways linked with RPE damage and sight-loss.