Bidirectional laser Doppler velocimetry and monochromatic fundus photography were used to investigate retinal hemodynamics before and after panretinal photocoagulation (PRP) in 25 eyes of 23 diabetic patients with proliferative retinopathy. After PRP, there was a significant decrease in retinal volumetric blood flow rate and an increase in the retinal vascular regulatory response to hyperoxia (R). A significant association was found between the presence or absence of regression of neovascularization and the increase or decrease in R after PRP. Eyes that showed regression of neovascularization had significantly larger average R after PRP than eyes that did not show regression. Lack of improvement in R after PRP may be related to the presence of remaining ischemia or hypoxia in eyes that continue to show proliferation after PRP.