Retinopathy is a major complication of diabetes mellitus and this condition remains a leading cause of blindness in the working population of developed countries. As diabetic retinopathy progresses a range of neuroglial and microvascular abnormalities develop although it remains unclear how these pathologies relate to each other and their net contribution to retinal damage. From a haemodynamic perspective, evidence suggests that there is an early reduction in retinal perfusion before the onset of diabetic retinopathy followed by a gradual increase in blood flow as the complication progresses. The functional reduction in retinal blood flow observed during early diabetic retinopathy may be additive or synergistic to pro-inflammatory changes, leucostasis and vaso-occlusion and thus be intimately linked to the progressive ischaemic hypoxia and increased blood flow associated with later stages of the disease. In the current review a unifying framework is presented that explains how arteriolar dysfunction and haemodynamic changes may contribute to late stage microvascular pathology and vision loss in human diabetic retinopathy.