The results of recent studies have implicated local inflammation and complement activation as the processes involved in the pathogenesis of age-related macular degeneration (AMD). We have demonstrated that amyloid beta (Abeta), which is deposited in drusen, causes an imbalance in the angiogenesis-related factors in retinal pigment epithelial cells. We have also shown that neprilysin gene-disrupted mice accumulate Abeta, and develop several features of AMD. The purpose of this study was to investigate the mechanisms involved in the development of AMD that are triggered by Abeta. Our results showed that Abeta binds to complement factor I which inhibits the ability of factor I to cleave C3b to inactivated iC3b. Factor H and factor I are soluble complement-activation inhibitors, and preincubation of factor I with Abeta in the presence of factor H abolished the ability of Abeta to cleave C3b, and also abolished the ability of factor I to cleave FGR-AMC. In contrast, Abeta did not affect the function of factor H even after binding. The production of iC3b was significantly decreased when C3b and factor H were incubated with the eyes from neprilysin gene-disrupted mice as compared with when C3b and factor H were incubated with eyes from age-matched wild-type mice. These results suggest that Abeta activates the complement system within drusen by blocking the function of factor I leading to a low-grade, chronic inflammation in subretinal tissues. These findings link four factors that have been suggested to be associated with AMD: inflammation, complement activation, Abeta deposition, and drusen.