Purpose: To examine (i) the retinal structure and function using optical coherence tomography angiography (OCTA) and multifocal electroretinography (mfERG), respectively, in eyes with and without nonproliferative diabetic retinopathy (NPDR), (ii) and their interrelationship between retinal structure (OCTA) and function (mfERG) in the two groups independently. Methods: This was a prospective observational study. One hundred twenty-one eligible participants with type 2 diabetes with No DR ( n = 89), or with mild or moderate NPDR ( n = 32) underwent ophthalmic examination, ultrawide field-view fundus photography, OCTA, and mfERG. Group differences were assessed using a Mann–Whitney U test. Correlations were assessed using Spearman's rho. Results: There were no significant differences in OCTA measures between the two groups. The mfERG P1 implicit times (rings 1–6) were significantly delayed and P1 response densities in rings 5 and 6 were significantly lower in participants with NPDR compared to those with No DR. In those with No DR, P1 implicit times in almost all rings were delayed in relation to lower vessel density and perfusion (maximum variance noted was 13%). In individuals with NPDR, the P1 response density in rings 2 and 3 showed a positive nonsignificant correlation with macular perfusion. Conclusion: In those with diabetes with No DR, retinal neuronal function is influenced by lower macular vessel density and perfusion. The retinal neuronal function is abnormal in individuals with NPDR compared to those with No DR and is not correlated with OCT angiometric measures, suggesting the likelihood of a different retinal structural correlate.