The effects of diabetes on the neural retina before the onset of clinically detectable retinopathy can be investigated with electrophysiological methods. Our aim was to detect early retinal dysfunctions in 60 patients with insulin-dependent diabetes mellitus (IDDM) and with a short duration of disease. We used the steady-state focal (9 degrees field size) electroretinogram (ERG) of the macula in response to luminance modulation of a uniform field (flicker ERG) or to counterphase-modulated sinusoidal gratings (pattern ERG). The harmonic analysis of flicker ERG and pattern ERG yielded three main components: a first and a second harmonic to flicker (1F and 2F, respectively) and a second harmonic to pattern (2P). The 1F is believed to be correlated to photoreceptor activity, whereas 2F and 2P represent different subsets of generators in the inner retina. Results of focal ERG in IDDM patients with no or early retinopathy were compared with age-matched control subjects. Mean 2F and 2P amplitudes were significantly reduced in IDDM patients compared with the control group (P = 0.0001 by analysis of variance). 2P but not 2F amplitude was significantly more reduced in patients with retinopathy than in those without retinopathy (P less than 0.05). 2F but not 2P phase abnormalities were observed in some patients. 2F and 2P alterations were slightly correlated with metabolic control (r = 0.22, P = 0.02) and disease duration (r = 0.28, P = 0.003). 1F was not significantly altered in IDDM patients. Our results suggest that early diabetes causes selective neurosensory deficits of inner retina layers, whereas the photoreceptors appear unaffected.