It is estimated that almost one million Australians will have diabetes by the year 2000. Of those with diabetes a significant proportion will have eye-related conditions, the most debilitating being diabetic retinopathy. Appropriate identification and treatment can result in prevention of visual loss and blindness. The importance of diabetes as a cause of blindness in our community is realised by the commencement of a national program by the National Health and Medical Research Council to develop clinical practice guidelines for the management of diabetic retinopathy. The development of these guidelines was based on available evidence following an extensive review of the literature up to May 1996. This review is a summary of our advances in research on the effect of diabetes on various aspects of the eye and vision over the past two years. This review is a compilation of articles of research on the effect of diabetes on various aspects of the eye and vision. As a result of the enormous amount of effort and work by scientists and clinicians around the world, as well as space restrictions, the review covers the past two years only. Although every effort has been made to include as many research articles as possible, not all articles of research are covered. It is intended that this review provide an overview of the latest trends in research, particularly relating to new techniques and methods in the study of diabetes in ocular tissue as well as the new theories in the development of ocular damage to each of the tissue.