Abnormalities in neuroretinal function may play a role in the development of diabetic retinopathy. The natural course of diabetic retinal dysfunction in a group of subjects with insulin-dependent diabetes mellitus and with no apparent microvascular alterations in the retina was followed-up with fluorescein angiography and a sensitive electrophysiological technique, i.e., steady-state focal electroretinogram at the macula, for 3 years. Before the beginning and throughout our study, strict glycaemic control was maintained by three or four daily insulin injections under careful monitoring. Analysis of macular electroretinogram provided information from different neural layers. At the first examination, functional activities of postreceptoral neurons were significantly decreased with respect to those of age-matched control subjects. Diabetic patients showed a functional loss of both ganglion cell (0.53 +/- 0.09 vs 0.42 +/- 0.11 microV; t = 5; p = 0.0001) and preganglion cell (0.51 +/- 0.13 vs 0.42 +/- 0.14 microV; t = 2.8; p = 0.007) layers. Diabetes did not alter photoreceptor activity. After 3 years, dysfunction was significantly greater in the preganglion cell layer (0.28 +/- 0.11 microV; t = 6.3; p = 0.0001). Although in some patients further impairment of ganglion cell function was shown, no significant difference was found in 3 years. Photoreceptor function remained unaltered. No vascular abnormalities in the retina were noted after 3 years in this group of patients. Metabolic control was not correlated to functional changes. Our findings suggest that the middle retinal layer is the most sensitive physiological locus of progressive diabetes-induced dysfunction in the absence of angiographically documented abnormalities.