Age-dependent accumulation of lipid-containing pigment granules representing residues of lysosomal digestion and called lipofuscin has been described in many somatic and neuronal cells, including the retinal pigment epithelium (RPE). RPE lipofuscin is the main source of the tissue autofluorescence (AF) and its formation is the result of the incomplete processing of the tips of the rod and cone outer segments, occurring daily. Excessive accumulation of lipofuscin is characterized by increased autofluorescence and leads to RPE dysfunction and cell death as part of the pathophysiological process of several sight-treating diseases such as age-related macular degeneration and Stargardt disease. Neither the mechanisms leading to RPE lipofuscin accumulation, nor the relative contributions of outer segment photoreceptor components, or the ways that the formed lipofuscin can be accumulated or degraded (e.g. autophagy) are well-understood. Here we demonstrate that oxidation of rod outer segments (ROS) enhances greatly the lipofuscin formation, compared to the autofluorescence generated by any other ROS component. Several bisretinoids were detected after phagocytosis of oxidized ROS, including the well-characterized molecule A2-E. Additionally, oxidation of ROS increases dramatically the rate of phagocytosis (3.5 times) in a linear manner during the first 24 hours. Furthermore, it is demonstrated that some degradation (~10%) of accumulated lipofuscin could occur naturally within the RPE cell over 7 days. Proteosomal inhibition by MG-132 and chloroquine and autophagy inhibition by 3-MA and NH4Cl increased, while either dual PI3/mTOR pathway inhibition by PI-103 or single PI3 lipid kinase inhibition by PIK-90 decreased lipofuscin formation. Our results imply a leading role for outer segment oxidation in formation and accumulation of RPE lipofuscin and suggest that stimulation of autophagy and/or interference with the several pathways, including mTOR, could stimulate the natural degradation of lipofuscin, opening new possibilities for the treatment of age-related diseases related to lipofuscin accumulation.