Mutations in the Prominin‐1 (Prom1) gene disrupt photoreceptor disk morphogenesis, leading to macular dystrophies. We have shown that human retinal pigment epithelial (RPE) homeostasis is under the control of Prom1‐dependent autophagy, demonstrating that Prom1 plays different roles in the photoreceptors and RPE. It is unclear if retinal and macular degeneration caused by the loss of Prom1 function is a cell‐autonomous feature of the RPE or a generalized disease of photoreceptor degeneration. In this study, we investigated whether Prom1 is required for mouse RPE (mRPE) autophagy and phagocytosis, which are cellular processes essential for photoreceptor survival. We found that Prom1‐KO decreases autophagy flux, activates mTORC1, and concomitantly decreases transcription factor EB (TFEB) and Cathepsin‐D activities in mRPE cells. In addition, Prom1‐KO reduces the clearance of bovine photoreceptor outer segments in mRPE cells due to increased mTORC1 and reduced TFEB activities. Dysfunction of Prom1‐dependent autophagy correlates with both a decrease in ZO‐1 and E‐cadherin and a concomitant increase in Vimentin, SNAI1, and ZEB1 levels, consistent with induction of epithelial‐mesenchymal transition (EMT) in Prom1‐KO mRPE cells. Our results demonstrate that Prom1‐mTORC1‐TFEB signaling is a central driver of cell‐autonomous mRPE homeostasis. We show that Prom1‐KO in mRPE leads to RPE defects similar to that seen in atrophic age‐related macular degeneration and opens new avenues of investigation targeting Prom1 in retinal degenerative diseases.