Thioredoxin-interacting protein (TXNIP) is involved in oxidative stress and apoptosis in diabetic retinopathy. However, the role of TXNIP in the removal of damaged mitochondria (MT) via mitophagy, a process of macroautophagy, remains unexplored. Here we investigate the associated cellular and molecular mechanisms underlying mitophagy in retinal cells under diabetic conditions. For this, we maintained a rat Müller cell line (rMC1) under high-glucose (25 mM, HG) or low-glucose (5.5 mM, LG) condition for 5 days. Our data reveal that HG upregulates TXNIP in the cytosol as well as in the MT. Moreover, mitochondrial oxidative stress and membrane depolarization occur under prolonged hyperglycemia leading to fragmentation. These damaged MT are targeted to lysosome for mitophagic degradation, as is evident by co-localization of mitochondrial protein COXIV, a subunit of cytochrome c oxidase, with autophagosome marker LC3BII and the lysosomal membrane protein LAMP2A. In addition, under HG conditions, there is an accumulation of dynamin-related fission protein Drp1 and E3 ubiquitin ligase Parkin in damaged MT, suggesting their roles in mitochondrial fragmentation and ubiquitination, respectively, which is absent in LG conditions. Subsequently, ubiquitin receptors, optineurin and p62/sequestrome 1, bind to the damaged MT and target them to LC3BII autophagosomes. Conversely, TXNIP knockout via CRISPR/Cas9 and TXNIP gRNA prevents the HG-induced mitochondrial damage and mitophagy in rMC1. Last, TXNIP level is also significantly upregulated in the diabetic rat retina in vivo and induces radial glial fibrillary acidic protein expression, a marker for Müller glia activation, and the formation of LC3BII puncta, which are prevented by intravitreal injection of TXNIP siRNA. Therefore, TXNIP represents a potential target for preventing ocular complications of diabetes.