Diabetic retinopathy is the leading cause of blindness in working age individuals in developed countries. Most cases of diabetes related vision loss result from breakdown of the blood-retinal barrier with resultant diabetic macular edema (DME). For over 30 years, laser photocoagulation has been the standard therapy for DME, but most eyes do not experience significant improvements in visual acuity. Intravitreal injections of drugs that inhibit the action of vascular endothelial growth factor (VEGF) lead to gains in vision, but can be expensive and need to be repeated frequently. In addition to VEGF-mediated breakdown of the blood-retinal barrier, recent evidence suggests that inflammation plays an important role in the development of DME. Recognizing this, physicians have injected steroids into the vitreous and developers have created sustained release implants. Intravitreal injections of triamcinolone acetonide lead to rapid resolution of macular edema and significant short-term improvements in visual acuity, but unfortunately, visual acuities diminish when treatment is continued through 2 years. However, intravitreal triamcinolone remains an attractive treatment option for eyes that are pseudophakic, scheduled to undergo cataract surgery, resistant to laser photocoagulation, or require urgent panretinal photocoagulation for proliferative retinopathy. In controlled trials, intraocular implants that slowly release dexamethasone and fluocinolone show promise in reducing macular edema and improving visual acuity. The high incidences of drug related cataracts and glaucoma, however, require that corticosteroids be used cautiously and that patients be selected carefully. The increasing number of patients with DME, the burgeoning cost of medical care and the continuing development of intravitreal steroids suggest that the use of these agents will likely increase in coming years.