Age-related macular degeneration (AMD) is commonly associated with retinal degeneration. Carotenoids, particularly lutein, can protect against AMD. Chlorella sp. has been widely used as a dietary supplement and contained high levels of lutein. Chlorella sp. biomass ethanol extract containing high lutein concentrations (CEE) was tested for its retinoprotective effects in retinal pigment epithelial (RPE) cells and light exposure-induced retinal degeneration in mice. The inhibitory activity of CEE on photooxidation of Bis-retinoid N-retinyl-N-retinylidene ethanolamine (A2E) was assessed in ARPE-19 cells. Retinal degeneration was induced by the exposure to 5000 lx of white LED light for 3 h. For one week, CEE (10, 25 and 50 mg/kg) and lutein (25 mg/kg) were administered orally. A retinal electroretinography (ERG) and a histological examination were conducted. Furthermore, oxidative DNA damage and apoptosis were quantified in the retina. CEE and lutein inhibited the A2E photooxidation and oxidized A2E-induced RPE injury. The results of an in vivo experiment also demonstrate that CEE and lutein have powerful anti-oxidative and anti-apoptotic effects on mice with light-induced retinal degeneration. There were fewer histological changes in the ONL layer in mice that were treated with CEE and lutein. CEE and lutein have both a- and b-wave amplitude increments in ERG analysis. The TUNEL-positive cells and 8-OHdG expression in the retinas were reduced by CEE and lutein. CEE may prevent retinal photoreceptors from light-induced structural and functional damage. The active ingredient, lutein, is responsible for this retinoprotective activity. CEE can provide the additional benefit in patients with retinal degenerative diseases.