Age-related macular degeneration (AMD) is the leading cause of low vision and blindness for which there is currently no cure. Increased matrix metalloproteinase-9 (MMP-9) was found in AMD and potently contributes to its pathogenesis. Resident microglia also promote the processes of chronic neuroinflammation, accelerating the progression of AMD. The present study investigates the effects and mechanisms of the natural compound theissenolactone B (LB53), isolated from Theissenia cinerea, on the effects of RPE dysregulation and microglia hyperactivation and its retinal protective ability in a sodium iodate (NaIO₃)-induced retinal degeneration model of AMD. The fungal component LB53 significantly reduces MMP-9 gelatinolysis in TNF-α-stimulated human RPE cells (ARPE-19). Similarly, LB53 abolishes MMP-9 protein and mRNA expression in ARPE-19 cells. Moreover, LB53 efficiently suppresses nitric oxide (NO) production, iNOS expression, and intracellular ROS levels in LPS-stimulated TLR 4-activated microglial BV-2 cells. According to signaling studies, LB53 specifically targets canonical NF-κB signaling in both ARPE-19 and BV-2 microglia. In an RPE-BV-2 interaction assay, LB53 ameliorates LPS-activated BV-2 conditioned medium-induced MMP-9 activation and expression in the RPE. In NaIO₃-induced AMD mouse model, LB53 restores photoreceptor and bipolar cell dysfunction as assessed by electroretinography (ERG). Additionally, LB53 prevents retinal thinning, primarily the photoreceptor, and reduces retinal blood flow from NaIO₃ damage evaluated by optic coherence tomography (OCT) and laser speckle flowgraphy (LSFG), respectively. Our results demonstrate that LB53 exerts neuroprotection in a mouse model of AMD, which can be attributed to its anti-retinal inflammatory effects by impeding RPE-mediated MMP-9 activation and anti-microglia.