Recessive Stargardt disease (STGD1) is an inherited retinopathy caused by mutations in the ABCA4 gene. The ABCA4 protein is a phospholipid-retinoid flippase in the outer segments of photoreceptors and the internal membranes of retinal pigment epithelial (RPE) cells. Here, we show that RPE cells derived via induced pluripotent stem-cell from a molecularly and clinically diagnosed STGD1 patient exhibited reduced ABCA4 protein and diminished activity compared to a normal subject. Consequently, STGD1 RPE cells accumulated intracellular autofluorescence-lipofuscin and displayed increased complement C3 activity. The level of C3 inversely correlated with the level of CD46, an early negative regulator of the complement cascade. Persistent complement dysregulation led to deposition of the membrane attack complex on the surface of RPE cells, decrease in transepithelial resistance, and subsequent cell death. These findings are strong evidence of complement-mediated RPE cell damage in STGD1, in the absence of photoreceptors, caused by reduced CD46 regulatory protein.