Age-related macular degeneration (AMD) affects the retinal pigment epithelium (RPE), a cell monolayer essential for photoreceptor survival, and is the leading cause of vision loss in the elderly. There are no disease-altering therapies for dry AMD, which is characterized by accumulation of subretinal drusen deposits and complement-driven inflammation. We report the derivation of human-induced pluripotent stem cells (hiPSCs) from patients with diagnosed AMD, including two donors with the rare ARMS2/HTRA1 homozygous genotype. The hiPSC-derived RPE cells produce several AMD/drusen-related proteins, and those from the AMD donors show significantly increased complement and inflammatory factors, which are most exaggerated in the ARMS2/HTRA1 lines. Using a panel of AMD biomarkers and candidate drug screening, combined with transcriptome analysis, we discover that nicotinamide (NAM) ameliorated disease-related phenotypes by inhibiting drusen proteins and inflammatory and complement factors while upregulating nucleosome, ribosome, and chromatin-modifying genes. Thus, targeting NAM-regulated pathways is a promising avenue for developing therapeutics to combat AMD.