Dysfunction of the retinal pigment epithelium (RPE) is a common shared pathology in major degenerative retinal diseases despite variations in the primary etiologies of each disease. Due to their demanding and indispensable functional roles throughout the lifetime, RPE cells are vulnerable to genetic predisposition, external stress, and aging processes. Building upon recent advancements in stem cell technology for differentiating healthy RPE cells and recognizing the significant roles of small extracellular vesicles (sEV) in cellular paracrine and autocrine actions, we investigated the hypothesis that the RPE-secreted sEV alone can restore essential RPE functions and rescue photoreceptors in RPE dysfunction-driven retinal degeneration. Our findings support the rationale for developing intravitreal treatment of sEV. We demonstrate that intravitreally delivered sEV effectively penetrate the full thickness of the retina. Xenogenic intraocular administration of human-derived EVs did not induce acute immune reactions in rodents. sEV derived from human embryonic stem cell (hESC)-derived fully differentiated RPE cells, but not sEV-depleted conditioned cell culture media (CCM minus sEV), rescued photoreceptors and their function in a Royal College of Surgeons (RCS) rat model. This model is characterized by photoreceptor death and retinal degeneration resulting from a mutation in the MerTK gene in RPE cells. From the bulk RNA sequencing study, we identified 447 differently expressed genes in the retina after hESC-RPE-sEV treatment compared with the untreated control. Furthermore, 394 out of 447 genes (88%) showed a reversal in expression toward the healthy state in Long-Evans (LE) rats after treatment compared to the diseased state. Particularly, detrimental alterations in gene expression in RCS rats, including essential RPE functions such as phototransduction, vitamin A metabolism, and lipid metabolism were partially reversed. Defective photoreceptor outer segment engulfment due to intrinsic MerTK mutation was partially ameliorated. These findings suggest that RPE-secreted sEV may play a functional role similar to that of RPE cells. Our study justifies further exploration to fully unlock future therapeutic interventions with sEV in a broad array of degenerative retinal diseases.