Age-related macular degeneration (ARMD) is the leading cause for visual impairment and blindness in the elder population. Laser photocoagulation, photodynamic therapy and excision of neovascular membranes have met with limited success. Submacular transplantation of autologous iris pigment epithelial (IPE) cells has been proposed to replace the damaged retinal pigment epithelium following surgical removal of the membranes. We tested our hypothesis that the subretinal transplantation of genetically modified autologous IPE cells expressing biological therapeutics might be a promising strategy for the treatment of ARMD and other retinal disorders. Pigment epithelium-derived factor (PEDF) has strong antiangiogenic and neuroprotective activities in the eye. Subretinal transplantation of PEDF expressing IPE cells inhibited pathological choroidal neovascularization in rat models of laser-induced rupture of Bruch's membrane and of oxygen induced ischemic retinopathy. PEDF expressing IPE transplants also increased the survival and preserved rhodopsin expression of photoreceptor cells in the RCS rat, a model of retinal degeneration. These findings suggest a promising concept for the treatment of ARMD and other retinal disorders.