The Alu element, the most abundant transposable element, is transcribed to Alu RNA. We hypothesized that the PIWI protein regulates the expression of Alu RNA in retinal pigment epithelial (RPE) cells, where accumulated Alu RNA leads to macular degeneration. Alu transcription was induced in RPE cells treated with H2O2. At an early stage of oxidative stress, PIWIL4 was translocated into the nucleus; however, subsequently it was sequestered into cytoplasmic stress granules, resulting in the accumulation of Alu RNA. An elevated amount of Alu RNA was positively correlated with the disruption of the epithelial features of RPE via induction of mesenchymal transition. Therefore, we suggest that oxidative stress causes Alu RNA accumulation via PIWIL4 sequestration into the cytoplasmic stress granules.