Diabetic retinopathy is the most common cause of vision loss in working-age adults. Both inflammation and vascular endothelial growth factor (VEGF) play a critical role, modern and emerging treatments have centred on both laser photocoagulation and new pharmacologic strategies to improve the prognosis. Focal and grid photocoagulation, as described in the ETDRS trials, remain the gold standard of treatment. New classes of agents include long-acting steroid formulations delivered as intravitreal injections and also anti-VEGF agents. In addition, studies are under way to evaluate potential benefits from other novel agents, including those acting on the mammalian target of rapamycin pathway. In limited numbers of direct head-to-head comparisons, both steroids and anti-VEGF agents appear to be superior to conventional photocoagulation in reducing macular oedema in the first 4-6 months after treatment, although laser photocoagulation appears to be superior at time points of 1-2 years. In addition, there appear to be significant potential long-term complications of steroids including cataracts and glaucoma that may limit their use in certain patients. New methods of the laser delivery including shorter pulse durations and pattern scanning may also improve the effectiveness and risk profile of laser from the patient prospective. Finally, multi-modality therapy may play an increasingly important role.