Alu retroelements propagate via retrotransposition by hijacking long interspersed nuclear element-1 (L1) reverse transcriptase (RT) and endonuclease activities. Reverse transcription of Alu RNA into complementary DNA (cDNA) is presumed to occur exclusively in the nucleus at the genomic integration site. Whether Alu cDNA is synthesized independently of genomic integration is unknown. Alu RNA promotes retinal pigmented epithelium (RPE) death in geographic atrophy, an untreatable type of age-related macular degeneration. We report that Alu RNA-induced RPE degeneration is mediated via cytoplasmic L1-reverse-transcribed Alu cDNA independently of retrotransposition. Alu RNA did not induce cDNA production or RPE degeneration in L1-inhibited animals or human cells. Alu reverse transcription can be initiated in the cytoplasm via self-priming of Alu RNA. In four health insurance databases, use of nucleoside RT inhibitors was associated with reduced risk of developing atrophic macular degeneration (pooled adjusted hazard ratio, 0.616; 95% confidence interval, 0.493-0.770), thus identifying inhibitors of this Alu replication cycle shunt as potential therapies for a major cause of blindness.