Photocoagulation by either the argon laser or xenon arc instruments has been reported to have a beneficial effect in selected patients with macular edema. Treatment is not effective in all cases; indeed, in some patients with perifoveal capillary closure, severe macular edema, long-standing organized hard exudates, or significant cystoid maculopathy, treatment has proved to be ineffective. Findings associated with a generally favorable or an unfavorable prognosis following photocoagulation are discussed in this chapter, along with proper management of the patient's systemic status, with particular emphasis on the problem of hypertension, important in patients with diabetic macular edema. Because the results of photocoagulation are limited in a significant number of patients, further research into the basic pathogenetic mechanisms involved in increased retinal capillary permeability to recommended, with the hope of providing more effective therapy.