The neuroprotective effect of carbamylated erythropoietin (CEPO), an erythropoietin (EPO) derivative, in diabetic retinopathy (DR) has not been clearly verified. We conducted this study to investigate the potential neuroprotective role of CEPO in a streptozotocin-induced diabetic rat model. Streptozotocin-induced diabetic rats and blank controls were treated with or without CEPO and EPO for 4 weeks. Retinal functional and histological changes were quantified by electroretinogram, light microscopy, and terminal dUTP nick end labeling assay. Gene and protein levels of colony-stimulating factor 2 receptor beta, low-affinity (CD131), EPO receptor (EPOR), THY1, glial fibrillary acidic protein (GFAP), and vascular endothelial growth factor (VEGF-A) in retinal tissues were determined by real-time PCR and western blotting, respectively. Vascular penetration was assessed by fluorescein retinal angiography. Diabetic rats had decreased retinal thickness, decreased ganglion cells, and increased retinal neuron apoptosis. CEPO increased CD131 and THY1 expression, while EPO increased EPOR expression. High glucose increased GFAP expression in the diabetic group, but both CEPO and EPO attenuated the trend for increase. CEPO downregulated VEGF-A expression. The amplitudes of b-wave and oscillatory potentials were decreased in the untreated diabetic group, whereas neither parameter decreased in diabetic rats after CEPO or EPO treatment. Vascular leakage and microaneurysms in the diabetic group were significantly improved following CEPO treatment. CEPO has similar anti-apoptotic effects to EPO in DR, but CEPO does not induce neovascularization. CEPO may exert neuroprotective effects via its receptor CD131.