Seven eyes had subretinal fibrosis after grid laser photocoagulation for diabetic macular edema. The fibrosis caused persistent loss in visual acuity, and in six of the seven eyes, was not associated with detectable laser-induced Bruch's membrane rupture or subretinal hemorrhage. Choroidal neovascularization was detected in only one patient, who was notably younger (27 years) than the median age of 70 years in this series. The median preoperative visual acuity was 20/80 (range, 20/40 to 20/400); the median postoperative visual acuity was 20/400 (range, 20/80 to counting fingers). The subretinal fibrosis was detected at a median of three months (range, 14 days to 4 1/2 months) after laser therapy. In one of five bilaterally treated patients (20%), subretinal fibrosis developed in both eyes. Subretinal fibrosis may be caused by undetected choroidal neovascularization or by excessive proliferation after stimulation of an aged retinal pigment epithelium. Subretinal fibrosis may be a potential cause of loss in visual acuity after laser treatment for diabetic macular edema.