Diabetes mellitus has profound effects on multiple organ systems; however, the loss of vision caused by diabetic retinopathy might be one of the most impactful in a patient's life. The retina is a highly metabolically active tissue that requires a complex interaction of cells, spanning light sensing photoreceptors to neurons that transfer the electrochemical signal to the brain with support by glia and vascular tissue. Neuronal function depends on a complex inter-dependency of retinal cells that includes the formation of a blood-retinal barrier. This dynamic system is negatively affected by diabetes mellitus, which alters normal cell-cell interactions and leads to profound vascular abnormalities, loss of the blood-retinal barrier and impaired neuronal function. Understanding the normal cell signalling interactions and how they are altered by diabetes mellitus has already led to novel therapies that have improved visual outcomes in many patients. Research highlighted in this Review has led to a new understanding of retinal pathophysiology during diabetes mellitus and has uncovered potential new therapeutic avenues to treat this debilitating disease.