Diabetic retinopathy is the leading cause of blindness. In Japan about 45% of diabetic patients under medical care have retinopathy and 10% have proliferative retinopathy. Until recently, Scott's classification (1953, 1957) of retinopathy was commonly used in Japan. As there are several problems with this classification, I proposed a new classification in 1983. It aims to separate benign and malignant types and to be more useful clinically so that each stage corresponds better to the indication of specific treatment. Diabetic retinopathy is divided into benign (type A) and malignant (type B) retinopathy, and each type is subdivided into 5 stages. Benign retinopathy is unlikely to cause blindness unless maculopathy is present. It includes background retinopathy (A1 and A2) and interrupted proliferative retinopathy (A3, A4 and A5) after photocoagulation or vitrectomy. Malignant retinopathy is likely to get worse and may lead to blindness if left without specific treatment. It includes preproliferative retinopathy (B1), early (B2), advanced (B3) and end-stage (B4 and B5) proliferative retinopathy. The presence of specific findings is described by the addition of letters: maculopathy (M), tractional retinal detachment (D), neovascular glaucoma (G), and ischemic optic neuropathy (N). Systemic metabolic control of diabetes is the best means of treatment for benign retinopathy, but malignant retinopathy should immediately be seen by ophthalmologists for specific treatment: focal photocoagulation for B1, focal or panretinal photocoagulation for B2 and panretinal photocoagulation for B3-B5. Vitrectomy is indicated in B4 or more severe stages.