Diabetic retinopathy (DR) still remains the leading cause of blindness in the working population of Japan and western world, though therapies such as retinal photocoagulation and vitrectomy can be remarkably effective when administered at an appropriate stage in the disease process. Consequently, there is a need for further investigation of the pathogenesis of DR to develop better therapy. DR is characterized by gradually progressive alterations in the retinal microvasculature, leading to three fundamental morbidities: (1) vascular hyperpermeability, (2) vascular occlusion, and (3) neovascularization. Recent studies have revealed that hyperglycemia causes several metabolic disorders which cause DR directly or indirectly through the abnormal expression of cytokines including vascular endothelial growth factor (VEGF). In this study, we performed precise tests of the correlation between intraocular VEGF and the three fundamental changes in the diabetic retina mentioned above. Ultrastructural study of the human retina revealed that two major pathways are responsible for hyperpermeability of diabetic retinal vessels, ie intercellular or paracellular transport (opening of the tight junctions) and intracellular or transcellular transport (caveolae, intracytoplasmic vesicles, and fenestration). All these pathways were induced by intravitreal injection of VEGF. The major trigger of VEGF overexpression is tissue ischemia caused by vascular occlusion. However, the retinas from the eyes with background DR revealed increased expression of VEGF without apparent incidence of vascular occlusion. We have identified accumulation of advanced glycation end products (AGEs) in these retinas, and found that AGEs are a major stimulus for VEGF overexpression in background DR. Retinal vascular occlusion was caused by thrombus formation primarily in the capillary vessels. Thrombi mainly consisted of fibrin, platelets, and leucocytes in the early stage of their formation, and glial cells and macrophages were also involved in the later stage. The blood coagulation process plays an important role in fibrin formation in thrombi. The expression of tissue factor (TF), an initiator of extrinsic blood coagulation, was upregulated by VEGF in retinal vascular endothelial cells (REC). In addition, AGEs were also thrombogenic through the induction of TF expression and suppression of the expression of prostacyclin stimulating factor (PSF), which stimulate prostacyclin synthesis in vascular endothelial cells. These findings suggest that AGEs, VEGF, and TF could interact in a vicious circle because AGEs and VEGF could induce retinal vascular occlusion which results in further increase in VEGF expression. Intravitreal injection of VEGF could induce retinal neovascularization, VEGF stimulates vascular endothelial cell proliferation by binding to a specific receptor named kinase insert domain-containing receptor/fetal liver kinase (KDR/Flk-1, KDR). AGEs and basic fibroblast growth factor (bFGF) induced expression of KDR in REC, and a transcription factor Sp 1 was involved in this process. Since the expression of KDR as well as VEGF was already upregulated in the retinas with background DR, VEGF appeared to start to induce the proliferative changes long before the actual onset of proliferative DR. These findings indicated that VEGF and its receptor system plays a pivotal role all through the disease process of DR. We considered that amelioration of the activated VEGF and its receptor system could lead to the development of new therapy for DR. We have developed two novel methods to prevent retinal neovascularization by inhibiting VEGF and its receptor system. (1) An insulin sensitizing agent (troglitazone) inhibited proliferation, migration, and in vitro tube formation by REC as well as oxygen-induced retinal neovascularization in a mouse model. Thus, glycemic control by troglitazone could reduce the incidence of neovascularization in diabetic eyes. (2) Transfection of Sp 1 decoy into REC could inhibit the expression of KDR, which might lead to the suppression of VEGF and its receptor system in eyes with DR. In addition to inhibiting the incidence of retinal neovascularization, we are also developing a method to promote early regression of newly formed vessels. It has been hypothesized that the vasculature destabilized by angiopoietin-2 (Ang-2), a recently identified vasomodulating factor, regresses if there is not simultaneous angiogenic stimulus by VEGF. To induce Ang-2 expression in the retina, we have developed two targeted gene transfer methods: (1) retrovirus- mediated gene transfer to photocoagulation sites, and (2) adenovirus mediated gene transfer to Müller cells after vitrectomy. A combination of Ang-2 gene transfer and inhibition of VEGF and its receptor system by the methods mentioned above, together with photocoagulation or vitrectomy, could promote early regression of retinal neovascularization. In this study, we investigated the cellular biological mechanisms of DR. Then, based on our new findings, we proposed new therapy methods for DR.