This paper systematically reviews the published literature on the economic evidence of diabetic retinopathy screening. Twenty-nine electronic databases were searched for studies published between 1998 and 2008. Internet searches were carried out and reference lists of key studies were hand searched for relevant articles. The key search terms used were 'diabetic retinopathy', 'screening', 'economic' and 'cost'. The search identified 416 papers of which 21 fulfilled the inclusion criteria, comprising nine cost-effectiveness studies, one cost analysis, one cost-minimization analysis, four cost-utility analyses and six reviews. Eleven of the included studies used economic modelling techniques and/or computer simulation to assess screening strategies. To date, the economic evaluation literature on diabetic retinopathy screening has focused on four key questions: the overall cost-effectiveness of ophthalmic care; the cost-effectiveness of systematic vs. opportunistic screening; how screening should be organized and delivered; and how often people should be screened. Systematic screening for diabetic retinopathy is cost-effective in terms of sight years preserved compared with no screening. Digital photography with telemedicine links has the potential to deliver cost-effective, accessible screening to rural, remote and hard-to-reach populations. Variation in compliance rates, age of onset of diabetes, glycaemic control and screening sensitivities influence the cost-effectiveness of screening programmes and are important sources of uncertainty in relation to the issue of optimal screening intervals. There is controversy in relation to the economic evidence on optimal screening intervals. Further research is needed to address the issue of optimal screening interval, the opportunities for targeted screening to reflect relative risk and the effect of different screening intervals on attendance or compliance by patients.