To assess the performance of digital imaging, compared with other modalities, in screening for and monitoring the development of diabetic retinopathy. All imaging was acquired at a hospital assessment clinic. Subsequently, study optometrists examined the patients in their own premises. A subset of patients also had fluorescein angiography performed every 6 months. Research clinic at the hospital eye clinic and optometrists' own premises. Study comprised 103 patients who had type 1 diabetes mellitus, 481 had type 2 diabetes mellitus and two had secondary diabetes mellitus; 157 (26.8%) had some form of retinopathy ('any') and 58 (9.9%) had referable retinopathy. A repeat assessment was carried out of all patients 1 year after their initial assessment. Patients who had more severe forms of retinopathy were monitored more frequently for evidence of progression. Detection of retinopathy, progression of retinopathy and determination of when treatment is required. Manual grading of 35-mm colour slides produced the highest sensitivity and specificity figures, with optometrist examination recording most false negatives. Manual and automated analysis of digital images had intermediate sensitivity. Both manual grading of 35-mm colour slides and digital images gave sensitivities of over 90% with few false positives. Digital imaging produced 50% fewer ungradable images than colour slides. This part of the study was limited as patients with the more severe levels of retinopathy opted for treatment. There was an increase in the number of microaneurysms in those patients who developed from mild to moderate. There was no difference between the turnover rate of either new or regressed microaneurysms for patients with mild or with sight-threatening retinopathy. It was not possible in this study to ascertain whether digital imaging systems determine when treatment is warranted. In the context of a national screening programme for referable retinopathy, digital imaging is an effective method. In addition, technical failure rates are lower with digital imaging than conventional photography. Digital imaging is also a more sensitive technique than slit-lamp examination by optometrists. Automated grading can improve efficiency by correctly identifying just under half the population as having no retinopathy. Recommendations for future research include: investigating whether the nasal field is required for grading; a large screening programme is required to ascertain if automated grading can safely perform as a first-level grader; if colour improves the performance of grading digital images; investigating methods to ensure effective uptake in a diabetic retinopathy screening programme.