To examine the reaction of microglial cells (MG) when incubated with lipofuscin (LP) in vitro with emphasis on the immunological reaction of the MG toward LP and the suppression of this reaction by immunomodulatory agents. MG are involved in the pathogenesis of degenerative eye disorders such as age-related macular degeneration (AMD). LP is a heterogeneous waste material that accumulates in the retinal pigment epithelium (RPE) cells with advancing age. LP is known to have toxic effects on RPE cells and therefore an elevated LP-derived fundus autofluorescence is a risk factor for AMD development. MG in the subretinal space have been reported in eyes affected by AMD. Moreover, in senescent mice, subretinal MG were found, which display an autofluorescence that may be derived from LP uptake. In this study, we incubated MG (BV-2 cell line and primary cells from murine brain) in vitro with LP isolated from the human RPE. We observed phagocytosis, studied cell morphologies, and analyzed the cell culture supernatants. We also investigated the effect of the immunomodulatory agents hydrocortisone (HC), minocycline, and the tripeptide TKP. The MG phagocytosed the LP quickly and completely. We detected highly elevated levels of pro-inflammatory cytokines (especially of IL-6, IL-23p19, TNF-α, KC, RANTES, and IL-1α) in the cell culture supernatants. Furthermore, levels of vascular endothelial growth factor (VEGF) were raised in BV-2 cells. Anti-inflammatory agents added to the cell cultures inhibited the inflammatory reaction, in particular hydrocortisone (HC). Minocycline and TKP had less impact on the cytokine release. The interaction of MG and LP could play a role in the development of retinal degeneration by triggering an inflammatory reaction and angiogenesis.