Non-insulin-dependent diabetes mellitus (NIDDM) occurs with a higher frequency in Hispanic as compared with non-Hispanic whites. It also appears that there is a higher prevalence of diabetic nephropathy in the Hispanic population when compared with non-Hispanic whites. In the current study, 144 Hispanics and 671 non-Hispanic white NIDDM subjects were studied to determine the possible association of various risk factors and diabetic complications, including overt albuminuria, with diabetic retinopathy. Stereoscopic retinal fundus photographs were obtained and graded by the University of Wisconsin Fundus Photographic Reading Center. We also sought to determine whether risk factors for retinopathy vary between Hispanics and non-Hispanic whites. In the total group, duration of diabetes, glycosylated hemoglobin, neuropathy, diastolic hypertension, use of insulin, and Hispanic ethnicity correlated with the presence of retinopathy. Controlling for severity and duration of diabetes, Hispanics had a significantly increased risk of retinopathy relative to non-Hispanic whites (OR = 2.13, 95% CI = 1.34, 3.37, P = 0.0013). Duration of diabetes and presence of neuropathy were significantly correlated with the presence of diabetic retinopathy in Hispanics and non-Hispanic whites. The presence of overt albuminuria (>200 microg/min), although not related to diabetic retinopathy in non-Hispanic whites, conferred a high risk for diabetic retinopathy in Hispanics (OR = 11.14, CI = 1.20, 103.39, P = 0.0339) independent of other risk factors. In summary, Hispanics with NIDDM have an increased prevalence of diabetic retinopathy when compared with non-Hispanic whites. In addition, overt albuminuria in the Hispanic subjects appears to be a powerful predictor of the diabetic retinopathy.