Neutrophil myeloperoxidase (MPO) catalyzes the H2O2-dependent oxidation of chloride anion to generate hypochlorous acid, a potent antimicrobial agent. Besides its well defined role in innate immunity, aberrant degranulation of neutrophils in several inflammatory diseases leads to redistribution of MPO to the extracellular space, where it can mediate tissue damage by promoting the oxidation of several additional substrates. Here, we demonstrate that mannose 6-phosphate receptor-mediated cellular uptake and delivery of MPO to lysosomes of retinal pigmented epithelial (RPE) cells acts to clear this harmful enzyme from the extracellular space, with lysosomal-delivered MPO exhibiting a half-life of 10 h. Lysosomal-targeted MPO exerts both cell-protective and cytotoxic functions. From a therapeutic standpoint, MPO catalyzes the in vitro degradation of N-retinylidene-N-retinylethanolamine, a toxic form of retinal lipofuscin that accumulates in RPE lysosomes and drives the pathogenesis of Stargardt macular degeneration. Furthermore, chronic cellular uptake and accumulation of MPO in lysosomes coincides with N-retinylidene-N-retinylethanolamine elimination in a cell-based model of macular degeneration. However, lysosomal-delivered MPO also disrupts lysosomal acidification in RPE cells, which coincides with nuclear translocation of the lysosomal stress-sensing transcription factor EB and, eventually, cell death. Based on these findings we predict that under periods of acute exposure, cellular uptake and lysosomal degradation of MPO mediates elimination of this harmful enzyme, whereas chronic exposure results in progressive accumulation of MPO in lysosomes. Lysosomal-accumulated MPO can be both cell-protective, by promoting the degradation of toxic retinal lipofuscin deposits, and cytotoxic, by triggering lysosomal stress and cell death.