We studied the efficacy of mild hyperthermia as a protective measure against subsequent laser-induced thermal damage. Using a well established in vitro retinal model for laser bioeffects, consisting of an artificially pigmented human retinal pigment epithelial (RPE) cell culture (hTERT-RPE1), we found both protection and sensitization to laser damage that depended upon the location of pigment granules during the hyperthermia preconditioning (PC). Photothermal challenge of cell monolayers consisted of 16 independent replicate exposures of at 514 nm and post laser damage was assessed using fluorescence indicator dyes. Untreated cells had 44% damage, but when melanosome particles (MPs) were intracellular or extracellular during the hyperthermia treatment, laser-induced cell damage occurred 94% or 25% of the time, respectively. Using a recently published method called microthermography, we found that the hyperthermia pretreatment did not alter the threshold temperature for cell death, indicating an alteration in absorption or localization of heat as the mechanism for sensitization and protection. Raman microspectroscopy revealed significant chemical changes in MPs when they were preconditioned within the cytoplasm of cells. Our results suggest intracellular pigment granules undergo chemical modifications during mild hyperthermia that can profoundly affect absorption or heat dissipation.