Retinopathy is present in 60%-80% of long-term diabetics, and 5%-10% of diabetics surviving 20 yr from the time of diagnosis will be blind, mostly from retinopathy, which is now the commonest cause of newly diagnosed blindness in the 30-65 yr age group. The mean survival time after a diagnosis of retinopathy is only 5 yr. The natural history of diabetic retinopathy is now being understood more clearly. Mild background retinopathy, characterised by microaneurysms or scattered hard exudates, may progress to maculopathy, with macular vascular pathology leading to exudates and edema at the macula; this is most common in older patients. It may also lead to proliferative retinopathy, which may progress slowly with new vessels and fibrous-tissue formation, or rapidly with widespread capillary closure and soft-exudate formation, extensive neovascularisation, hemorrhages, and blindness. The changes of diabetic retinopathy can be documented using retinal photography, and several grading methods have been devised that are useful for evaluation treatment. The cause of diabetic retinopathy is still unclear. Evidence for incriminating genetic factors, growth-hormone excess, and hypoxia associated with changes in blood flow and retinal metabolism are reviewed. Insulin responses and plasma triglyceride seem to be different in maturity-onset diabetics with retinopathy when compared with those in whom this complication is absent. Most physicians agree that good diabetic control may both lower the incidence of retinopathy and reduce the speed of its progress. While there is little evidence that drugs are ever of much value in this condition, the role of photocoagulation both by laser and xenon arc is becoming clearer with increased experience of these techniques, and the current situation is reviewed. Pituitary ablation is a very drastic method of treatment and should never be used as a desperate measure in a patient with advanced proliferative disease. It is, however, the treatment of choice in early florid retinopathy, when it proves the only chance to arrest the condition. Some new techniques of vitreous surgery are now being developed and the possible role of these in the management of patients with advanced proliferative disease is briefly reviewed.