OBJECTIVE - To assess racial differences in risk of developing retinopathy among individuals with type 2 diabetes, after taking into account differences in the distribution of risk factors for retinopathy. RESEARCH DESIGN AND METHODS - The participants were 105 individuals with type 2 diabetes, aged 40-69 years, who had no evidence of retinopathy at the time of a diabetic eye disease screening project. After an average of 4 years of follow-up, the subjects were reevaluated using nonmydriatic fundus photography. RESULTS - Retinopathy occurred more often among black than white participants (50 vs. 19%). This difference could not be explained by differences in risk factors for retinopathy or potential confounders (odds ratio [95% CI] 2.96 [1.00-8.78] after adjustment for level of glycosylated hemoglobin, systolic blood pressure, type of diabetes treatment, and sex). CONCLUSIONS - These results are consistent with the concept that racial differences in risk of developing retinopathy exist among individuals with type 2 diabetes and that these differences may be caused by differential (genetic) susceptibility to the adverse effects of increased levels of blood glucose and/or blood pressure. Discovery of the etiology of this differential susceptibility would allow us to identify and target secondary prevention efforts to individuals with type 2 diabetes who are at increased risk of retinopathy.