The retinal changes associated with diabetes mellitus are a consequence of the systemic microangiopathy with modifications related to the intraocular environment. The vascular disorders underlying background retinopathy are arteriolar hyalinosis (which together with abnormalities in the circulating blood can give rise to focal capillary closure), venular dilatation, and capillaropathy in the form of pericyte degeneration, basement membrane thickening and microaneurysm formation. Retinal complications consist of plasma exudation and punctate haemorrhages. Maculopathy is due to cystoid oedema. Increasing closure of capillaries is linked with cotton-wool spots and intraretinal microvascular anomalies, the former reflecting a consequence and the latter a response to increased ischaemia. Vascular proliferation in front of the retina originates from venules close to areas of ischaemia; the endothelium may be fenestrated initially and fibrosis may accompany the new vessels.