Short interspersed element (SINE) RNAs are upregulated by cellular stresses1 (heat shock, DNA damage and viral infection) and accumulate in human diseases (macular degeneration2, lupus3, and Alzheimer’s disease4). These transcripts activate inflammasomes5, a family of cytoplasmic multiprotein complexes that sense danger molecules and initiate innate immune responses by activating caspase-1-dependent cytokine production and inflammatory death6, but the molecular sensor of SINE RNAs is unknown. Here, we identify DDX17, a member of the DEAD box family of RNA helicases7, as a sensor of SINE RNAs requisite for inflammasome activation. Induction of caspase-1 cleavage and release of IL-1 and IL-18 by SINE RNAs requires dual recruitment of NLRP3 and NLRC4 but proceeds independent of NAIPs, immune sensors required for canonical NLRC4 activation by bacterial proteins8,9. Instead, SINE RNAs trigger DDX17–NLRC4 interaction, which licenses inflammasome activation. We also report increased levels of DDX17 protein and association of DDX17 and NLRC4 in the retinal pigmented epithelium (RPE) of human eyes with an advanced, untreatable form of age-related macular degeneration (AMD). Disrupting DDX17–NLRC4 signalling blocks SINE RNA-induced inflammasome activation in human RPE cells and RPE degeneration in an animal model of AMD. Our findings uncover a non-canonical mode of inflammasome activation by endogenous retrotransposon transcripts, and provide new potential targets for macular degeneration and potentially other diseases.