Diabetic retinopathy (DR) is one of the major causes of visual impairment and irreversible blindness in developed regions. Aside from abnormal angiogenesis, inflammation is the most specific and might be the initiating factor of DR. As a key participant in inflammation, interferon-gamma (IFN-γ) can be detected in different parts of the eye and is responsible for the breakdown of the blood-retina barrier and activation of inflammatory cells and other cytokines, which accelerate neovascularization and neuroglial degeneration. In addition, IFN-γ is involved in other vascular complications of diabetes mellitus and angiogenesis-dependent diseases, such as diabetic nephropathy, cerebral microbleeds, and age-related macular degeneration. Traditional treatments, such as anti-vascular endothelial growth factor agents, vitrectomy, and laser photocoagulation therapy, are more effective for angiogenesis and not tolerable for every patient. Many ongoing clinical trials are exploring effective drugs that target inflammation. For instance, IFN-α acts against viruses and angiogenesis and is commonly used to treat malignant tumors. Moreover, IFN-α has been shown to contribute to alleviating the progression of DR and other ocular diseases. In this review, we emphasize the roles that IFNs play in the pathogenesis of DR and discuss potential clinical applications of IFNs in DR, such as diagnosis, prognosis, and therapeutic treatment.