In the pathogenesis of diabetic retinopathy, retinal mitochondria become dysfunctional resulting in accelerated apoptosis of its capillary cells. Matrix metalloproteinase-2 (MMP2) is considered critical in cell integrity and cell survival, and diabetes activates MMP2 in the retina and its capillary cells. This study aims at elucidating the mechanism by which MMP2 contributes to the development of diabetic retinopathy. Using isolated bovine retinal endothelial cells, the effect of regulation of MMP2 (by its siRNA and pharmacological inhibitor) on superoxide accumulation and mitochondrial dysfunction was evaluated. The effect of inhibiting diabetes-induced retinal superoxide accumulation on MMP2 and its regulators was investigated in diabetic mice overexpressing mitochondrial superoxide dismutase (MnSOD). Inhibition of MMP2 ameliorated glucose-induced increase in mitochondrial superoxide and membrane permeability, prevented cytochrome c leakage from the mitochondria, and inhibited capillary cell apoptosis. Overexpression of MnSOD protected the retina from diabetes-induced increase in MMP2 and its membrane activator (MT1-MMP), and decrease in its tissue inhibitor (TIMP-2). These results implicate that, in diabetes, MMP2 activates apoptosis of retinal capillary cells by mitochondrial dysfunction increasing their membrane permeability. Understanding the role of MMP2 in the pathogenesis of diabetic retinopathy should help lay ground for MMP2-targeted therapy to retard the development of retinopathy in diabetic patients.