In the retinas of streptozotocin-induced diabetic rats, the relationship between the expression of vascular endothelial growth factor (VEGF) and the breakdown of the blood-retinal barrier (BRB) was investigated. VEGF mRNA expression was examined by in situ hybridization and VEGF protein expression was examined by immunohistochemistry. BRB breakdown was immunohistochemically demonstrated by detecting extravasation of albumin. In diabetic retinas, VEGF mRNA was expressed by the following cells: (a) ganglion cells, (b) glial cells such as astrocytes and Muller cells, whose cell processes are closely associated with retinal vessels, (c) smooth muscle cells and pericytes in the vessel walls, and (d) the retinal pigment epithelium. In diabetic retinas, BRB breakdown was immunohistochemically detected, and VEGF protein expression was markedly increased in comparison to that in the control retinas. The rates of both BRB breakdown and VEGF immunoreactivity increased in proportion to the duration of diabetes. In addition, the rate of BRB breakdown was much higher in vessels with VEGF immunoreactivity than in vessels without VEGF immunoreactivity. These findings indicate that VEGF has a major promoting effect on BRB breakdown in simple diabetic retinopathy. VEGF immunoreactivity was distributed throughout all layers of the retinas, and were most prominently observed in the nerve fiber layer, especially near the optic disc and around large vessels. These two regions coincide with the sites wherein BRB breakdown is clinically detected by fluorescein angiography in diabetic patients. Neovascularization in proliferative diabetic retinopathy is also most commonly observed in these two regions. Because VEGF promotes endothelial proliferation, these findings suggest that VEGF plays a role in the budding of retinal neovascularization and, as a result, could induce proliferative diabetic retinopathy.