The common variant in the human complement Factor H gene (CFH), with Tyr402His, is linked to age-related macular degeneration (AMD), a prevalent disorder leading to visual impairment and irreversible blindness in elderly patients. Here we show that the risk variant CFH 402His displays reduced binding to C reactive protein (CRP), heparin and retinal pigment epithelial cells. This reduced binding can cause inefficient complement regulation at the cell surface, particularly when CRP is recruited to injured sites and tissue. In addition, we identify the Factor H-like protein 1 (FHL-1), an alternative splice product of the CFH gene as an additional protein that includes the risk residue 402, and thus confers risk for AMD. FHL-1 is expressed in the eye and the FHL-1 402His risk variant shows similar reduced cell binding and likely reduced complement regulatory functions on the cell surface. CFH and FHL-1 may act in concert in the eye and the reduced surface binding may result in inappropriate local complement control, which in turn can lead to inflammation, disturbance of local physiological homeostasis and progression to cell damage. As a consequence, these processes may lead to AMD pathogenesis.