The blood-retinal barrier breaks down early in diabetes and previous morphological studies suggest that the retinal pigment epithelium (RPE) is the site of this defect. In the present study the electron microscope lanthanum nitrate tracer technique has been used to study RPE cell permeability in the streptozotocin diabetic rat retina. The freeze-fracture technique has been used to study RPE cell tight junction structure as permeability increases. In the lanthanum experiments, RPE cell permeability is normal in control rats and in diabetic rats 3 weeks after the injections. After 8 or 16 weeks of diabetes, however, the RPE cell layer no longer forms a barrier to the tracer and electron dense material is present in the subretinal space, in the apical and basal regions of the RPE cell junctions and intracellularly within the RPE. Freeze-fracture studies of tight junctions during this period show (1) an increase in the complexity of the tight junction network due to an increase in anastomoses between the tight junctions; (2) a change in membrane fracturing properties such that the tight junctional intra-membrane particles adhering to the E-face grooves are more numerous than in the control junctions; (3) no change in the number or size of the tight and gap junctional elements. These results suggest that the blood-retinal barrier breakdown in the diabetic RPE is due to alteration of plasma membrane permeability rather than to a loss of tight junctions.