Best disease (BD) is an inherited degenerative disease of the human macula that results in progressive and irreversible central vision loss. It is caused by mutations in the retinal pigment epithelium (RPE) gene BESTROPHIN1 (BEST1), which, through mechanism(s) that remain unclear, lead to the accumulation of subretinal fluid and autofluorescent waste products from shed photoreceptor outer segments (POSs). We employed human iPS cell (hiPSC) technology to generate RPE from BD patients and unaffected siblings in order to examine the cellular and molecular processes underlying this disease. Consistent with the clinical phenotype of BD, RPE from mutant hiPSCs displayed disrupted fluid flux and increased accrual of autofluorescent material after long-term POS feeding when compared with hiPSC-RPE from unaffected siblings. On a molecular level, RHODOPSIN degradation after POS feeding was delayed in BD hiPSC-RPE relative to unaffected sibling hiPSC-RPE, directly implicating impaired POS handling in the pathophysiology of the disease. In addition, stimulated calcium responses differed between BD and normal sibling hiPSC-RPE, as did oxidative stress levels after chronic POS feeding. Subcellular localization, fractionation and co-immunoprecipitation experiments in hiPSC-RPE and human prenatal RPE further linked BEST1 to the regulation and release of endoplasmic reticulum calcium stores. Since calcium signaling and oxidative stress are critical regulators of fluid flow and protein degradation, these findings likely contribute to the clinical picture of BD. In a larger context, this report demonstrates the potential to use patient-specific hiPSCs to model and study maculopathies, an important class of blinding disorders in humans.