Neurodegeneration is an early event in the diabetic retina which may lead to diabetic retinopathy. One of the potential pathways in damaging retinal neurons is the activation of renin angiotensin system including angiotensin II type 1 receptor (AT1R) in the diabetic retina. The purpose of this study was to determine the effect of telmisartan, an AT1R blocker on retinal level of brain derived neurotrophic factor (BDNF), ciliary neurotrophic factor (CNTF) and tyrosine hydroxylase (TH), glutathione (GSH) and caspase activity in the diabetic rats. The dysregulated levels of these factors are known to cause neurodegeneration in diabetic retina. Three weeks streptozotocin induced diabetic rats were orally treated or untreated with telmisartan (10 mg/kg/day). After 4 weeks of treatments, the levels of BDNF and GSH were found to be increased systemically in the sera as well as in the retina of diabetic rats compared to untreated rats as measured by enzyme-linked immunosorbent assay and biochemical techniques (p < 0.05). The caspase-3 activity in the telmisartan treated diabetic retina was decreased compared to untreated diabetic rats (p < 0.05). Western blotting experiments showed the expression levels of BDNF, CNTF and TH were increased compared to untreated diabetic rats (p < 0.05). Thus, our findings show a beneficial effect of AT1R blocker telmisartan in efficiently increasing neurotrophic support, endogenous antioxidant GSH content, and decreasing signs of apoptosis in diabetic retina.