Sorsby fundus dystrophy (SFD) is a rare autosomal dominant disease of the macula that leads to bilateral loss of central vision and is caused by mutations in the TIMP3 gene. However, the mechanisms by which TIMP3 mutations cause SFD are poorly understood. Here, we generated human induced pluripotent stem cell‐derived retinal pigmented epithelial (hiPSC‐RPE) cells from three SFD patients carrying TIMP3 p.(Ser204Cys) and three non‐affected controls to study disease‐related structural and functional differences in the RPE. SFD‐hiPSC‐RPE exhibited characteristic RPE structure and physiology but showed significantly reduced transepithelial electrical resistance associated with enriched expression of cytoskeletal remodelling proteins. SFD‐hiPSC‐RPE exhibited basolateral accumulation of TIMP3 monomers, despite no change in TIMP3 gene expression. TIMP3 dimers were observed in both SFD and control hiPSC‐RPE, suggesting that mutant TIMP3 dimerisation does not drive SFD pathology. Furthermore, mutant TIMP3 retained matrix metalloproteinase activity. Proteomic profiling showed increased expression of ECM proteins, endothelial cell interactions and angiogenesis‐related pathways in SFD‐hiPSC‐RPE. By contrast, there were no changes in VEGF secretion. However, SFD‐hiPSC‐RPE secreted higher levels of monocyte chemoattractant protein 1, PDGF and angiogenin. Our findings provide a proof‐of‐concept that SFD patient‐derived hiPSC‐RPE mimic mature RPE cells and support the hypothesis that excess accumulation of mutant TIMP3, rather than an absence or deficiency of functional TIMP3, drives ECM and angiogenesis‐related changes in SFD. © 2020 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.