The purpose of this study was to analyse and compare the costs involved in screening for and treating sight-threatening diabetic retinopathy in three different clinical settings. In the first setting, diabetologists screened using ophthalmoscopy and color photography, according to the St. Vincent Declaration guidelines, and selected patients for further assessment by a visiting ophthalmologist and for treatment in another hospital. In the second setting, all patients were regularly referred to ophthalmologists, either in the same hospital or elsewhere, for all aspects of eye care. In the third setting, screening was done again with ophthalmoscopy alone by diabetologists who followed the St. Vincent Declaration guidelines; however, further assessment and treatment were carried out in the eye department of the same hospital. Costs to the Italian National Health Service and to patients were calculated per screening performed and per patient subjected to laser treatment as a result of screening. A sensitivity analysis was then performed to simulate the costs of standardised patient populations going through the three different settings. It is concluded that absolute costs would be lower, both for the Italian National Health Service and for patients, if screening, assessment and treatment were all carried out in the same hospital. Equipping a diabetic clinic specially for screening would not be more expensive than delegating eye care to external parties, even for a hospital without an eye department. Moreover, delegating eye care more than doubles costs for patients. Screening for, assessing and treating sight-threatening diabetic retinopathy may be a cost-effective procedure for society as a whole in Italy.