Lipofuscins are toxic autofluorescent byproducts of the visual cycle. The accumulation of lipofuscins such as cycloretinal in the retina is thought to play a role in the progression of age-related macular degeneration (AMD). Intriguingly, the milk protein β-lactoglobulin (BLG) can promote the cyclodimerization of all-trans-retinal to cycloretinal both in vitro and in vivo. Here, site-directed mutagenesis of BLG and mass spectrometric analysis with substrate analogues demonstrate that lysine residues play a key role in catalysis. It is also shown that catalytic activity necessitates the presence of a physical binding site and cannot be mediated by a peptide chain. These studies provide insight into the mechanism of the cyclodimerization process and provide a model system for biocatalysis and biosynthesis of cycloretinal in vivo. In the long term, these studies may pave the way for drug development and inhibitor design as an early treatment regimen for AMD.