Electroretinography (ERG) is an objective method of evaluating retinal function. Since its introduction to clinical practice in the 1940s, it has become a useful and routine diagnostic clinical tool in ophthalmology. This review summarizes the role of ERG as a clinical technique for evaluating the progression of diabetic retinopathy and as a research tool for increasing our understanding of the pathophysiology of diabetic retinopathy. Most studies show unequivocally that the different types of ERG tests detect local abnormalities or widespread pathology, even in very early stages of the disease. It seems plausible that measurements from ERG recordings, particularly the oscillatory potentials, may be useful for predicting progression from nonproliferative to the more sight-threatening stages--preproliferative or proliferative--of diabetic retinopathy. Some recent work implies that the ERG can also be a useful diagnostic method for discriminating between eyes with diabetic retinopathy and those without the condition.