High homocysteine is routinely observed in diabetic patients, and this non-protein amino acid is considered as an independent risk factor for diabetic retinopathy. Homocysteine biosynthesis from methionine forms S-adenosyl methionine (SAM), which is a major methyl donor critical in DNA methylation. Hyperhomocysteinemia is implicated in increased oxidative stress and activation of MMP-9, and in diabetic retinopathy, the activation of MMP-9 facilitates capillary cell apoptosis. Our aim was to investigate the mechanism by which homocysteine activates MMP-9 in diabetic retinopathy. Human retinal endothelial cells, incubated with/without 100 μM homocysteine, were analyzed for MMP-9 and its tissue inhibitor Timp1 expressions and interactions, and ROS levels. Timp1 and MMP-9 promoters were analyzed for methylated and hydroxymethylated cytosine levels (5mC and 5hmC respectively) by the DNA capture method, and DNA- methylating (Dnmt1) and hydroxymethylating enzymes (Tet2) binding by chromatin immunoprecipitation. The results were confirmed in retinal microvessels from diabetic rats receiving homocysteine. Homocysteine supplementation exacerbated hyperglycaemia-induced MMP-9 and ROS levels and decreased Timp1 and its interactions with MMP-9. Homocysteine also aggravated Dnmts and Tets activation, increased 5mC at Timp1 promoter and 5hmC at MMP-9 promoter, and suppressed Timp1 transcription and activated MMP-9 transcription. Similar results were obtained from retinal microvessels from diabetic rats receiving homocysteine. Thus, hyperhomocysteinemia in diabetes activates MMP-9 functionally by reducing Timp1-MMP-9 interactions and transcriptionally by altering DNA methylation-hydroxymethylation of its promoter. The regulation of homocysteine could prevent/slow down the development of retinopathy and prevent their vision loss in diabetic patients.