We present the results of a population based study designed to estimate the prevalence of diabetic retinopathy in a series of 284 type 2 diabetics residing in low income areas of Mexico City. These patients were identified in a survey performed between February 1990 and October 1992 (The Mexico City Diabetes Study). We located 214 (75.35%) of the original 284 patients and invited them to attend a clinic where they were interviewed and had a complete ophthalmologic examination. All participants had, in addition to the retinal examination by a certified ophthalmologist, seven fields stereo fundus photographs taken with a Topcon 50X retinal camera. Photos were taken using ASA 100 Kodak film and processed in their laboratory. All photographs were read and graded for quality and level of diabetic retinopathy (DR) in the Reading Center of the Department of Ophthalmology of the University of Wisconsin. A total of 37 (43.5%) men and 69 (53.5%) women had no evidence of DR. In 16 (18.8%) men and 21 (16.3%) women there was background DR. In 25 (29.4%) men and 30 (23.3%) women there was preproliferative DR. In 5 (5.9%) men and in 7 (5.4%) women there was proliferative DR. Macular edema was diagnosed in 7 (8.2%) men and 6 (4.7%) women, of these in 3 (3.5%) men and in 5 (3.9%) women the macular edema was central. This complication is associated with duration of diabetes, chronic poor metabolic control and microalbuminuria. A very significant proportion of cases with sight threatening DR remains undiagnosed and untreated. Consequently there is a significant number of cases developing into blindness that could have been prevented.