The recent revolution in age-related macular degeneration (AMD) genetics has demonstrated that genetic alterations affecting the alternative pathway of the complement cascade have a major influence on AMD risk. One of the two most important genetic loci is on chromosome 1 and contains genes encoding complement factor H (FH) and the factor H related proteins (FHR proteins). In macular tissue, especially Bruch's membrane, relatively high levels of a truncated splice variant of FH called factor H-like protein 1 (FHL-1) are present. Here we discuss how genetic variations may alter the amounts, or by altering their protein sequences, the functions of these proteins. In particular, the common Y402H polymorphism affects the ability of FHL-1 and FH to localize to Bruch's membrane and the inner choroid because it alters the ability of these complement regulators to bind heparan sulphate (HS) in these structures. In addition, there is an age-related loss of HS from Bruch's membrane. We hypothesize that a combination of poor binding of the 402H variants of FHL-1 and FH to Bruch's membrane, combined with a decrease in binding due to age-related HS loss, eventually results in insufficient FHL-1 and FH binding to Bruch's membrane. This could result in complement activation, inflammation and thereby predispose to AMD.