The purpose of this follow-up study was conducted to assess the incidence and risk factors of diabetic retinopathy (DR) among type 2 diabetics in Kinmen, Taiwan. A penal of eye screening regimes were performed yearly for 971 type 2 diabetics by two senior ophthalmologists using indirect ophthalmoscopy and 45-degree color fundus photography to examine fundus after dilating pupils from 1999 to 2002. 74.7% (725/971) of diabetics had been screened at least two times during this period. Among the 548 type 2 diabetics who had no DR at first screening, 93 subjects developed any type of DR. The 3-year 18.2% cumulative incidence was (95% CI: 14.8-21.5%) and incidence density was 6.62% per year (95% CI: 5.36-8.06% per year). Using Cox regression model, HbAlc revealed the significantly dose response relationship to the development of DR (chi2-test for trend = 9.41, p < 0.05) after controlling for confounding factors. Other independent predictors related to the development of DR included duration of diabetes (RR: 1.09, 95% CI: 1.05-1.13), higher systolic blood pressure (>140 vs. < 140 mm Hg, RR: 1.96, 95% CI: 1.23-3.12), and higher triglyceride (> 200 vs. < 200 mg/dl, RR: 1.60, 95% CI: 1.01-2.54). In conclusion, in addition to poor glycemic control of which is the most significant risk factor for the development of DR, longer duration of diabetes, higher systolic blood pressure, and elevated serum triglyceride levels were also associated with the development of DR among type 2 diabetics in Kinmen.