As a signaling hub, p62/sequestosome plays important roles in cell signaling and degradation of misfolded proteins. p62 has been implicated as an adaptor protein to mediate autophagic clearance of insoluble protein aggregates in age-related diseases, including age-related macular degeneration (AMD), which is characterized by dysfunction of the retinal pigment epithelium (RPE). Our previous studies have shown that cigarette smoke (CS) induces oxidative stress and inhibits the proteasome pathway in cultured human RPE cells, suggesting that p62-mediated autophagy may become the major route to remove impaired proteins under such circumstances. In the present studies, we found that all p62 mRNA variants are abundantly expressed and upregulated by CS induced stress in cultured human RPE cells, yet isoform1 is the major translated form. We also show that p62 silencing exacerbated the CS induced accumulation of damaged proteins, both by suppressing autophagy and by inhibiting the Nrf2 antioxidant response, which in turn, increased protein oxidation. These effects of CS and p62 reduction were further confirmed in mice exposed to CS. We found that over-expression of p62 isoform1, but not its S403A mutant, which lacks affinity for ubiquitinated proteins, reduced misfolded proteins, yet simultaneously promoted an Nrf2-mediated antioxidant response. Thus, p62 provides dual, reciprocal enhancing protection to RPE cells from environmental stress induced protein misfolding and aggregation, by facilitating autophagy and the Nrf2 mediated antioxidant response, which might be a potential therapeutic target against AMD.