Iron has an essential role in numerous biological processes, where its multiple oxidation states enable it to facilitate electron transfer reactions. However, this property also makes iron overload dangerous, as iron can catalyze the formation of reaction oxygen species. Iron overload has been implicated in the pathogenesis of many diseases, including atherosclerosis, Alzheimer’s and Parkinson’s diseases, and age-related macular degeneration (AMD). The retina is particularly vulnerable to iron-mediated damage due to its high metabolic rate, yet the mechanisms of iron transport in the retina and how iron can cause retinal damage are fully understood. In this work, we first refine the understanding of iron transport in the retina by examining hephaestin, a ferroxidase, and demonstrating that it has a local role in regulating iron homeostasis in the neural retina. Next, we explore the impact of iron on lysosomal function, demonstrating that iron overload leads to the accumulation of lipid-laden lysosomes in the retinal pigment epithelium. Together, our data improve our understanding of both iron homeostasis and dyshomeostasis, which can improve the development of therapies for retinal disease.