Inflammation is key to the pathogenesis of diabetic retinopathy (DR). This prospective study investigated alterations in inflammatory cytokines in peripheral blood mononuclear cells (PBMCs) in 41 people with type 1 diabetes (T1D), sub-grouped into mild non-proliferative DR (mNPDR; n = 13) and active and inactive (each n = 14) PDR. Age/gender-matched healthy controls ( n = 13) were included. PBMCs were isolated from blood samples. Intracellular cytokine expression by PBMCs after 16-h stimulation (either E. coli lipopolysaccharide (LPS), phorbol 12-myristate 13-acetate plus ionomycin, D-glucose or D-mannitol) were assessed by flow cytometry. Cytokine production in plasma, non-stimulated and LPS-stimulated PBMC supernatant was also assessed. Increased BMC IL-10 secretion and reduced expression of IL-6 and IFN-γ in CD3 + cells were observed in mNPDR. Reduced IL-6 and IL-10 secretion, and higher levels of intracellular IL-6 expression, especially in CD11b + PBMCs, was detected in aPDR; levels were positively correlated with DR duration. Patients with T1D demonstrated increased intracellular expression of IL-17A in myeloid cells and reduced IFN-γ expression in CD3 + cells. Plasma levels of IL-1R1 were increased in mNPDR compared with controls. Results suggest that elevated PBMC-released IL-10, IL-6, in particular myeloid-produced IL-17A, may be involved in early stages of DR. IL-6-producing myeloid cells may play a role in PDR development.