AIM: To explore the performance in diabetic retinopathy (DR) screening of artificial intelligence (AI) system by evaluating the image quality of a handheld Optomed Aurora fundus camera in comparison to traditional tabletop fundus cameras and the diagnostic accuracy of DR of the two modalities. METHODS: Overall, 630 eyes were included from three centers and screened by a handheld camera (Aurora, Optomed, Oulu, Finland) and a table-top camera. Image quality was graded by three masked and experienced ophthalmologists. The diagnostic accuracy of the handheld camera and AI system was evaluated in assessing DR lesions and referable DR. RESULTS: Under nonmydriasis status, the handheld fundus camera had better image quality in centration, clarity, and visible range (1.47, 1.48, and 1.40) than conventional tabletop cameras (1.30, 1.28, and 1.18; P<0.001). Detection of retinal hemorrhage, hard exudation, and macular edema were comparable between the two modalities, in principle, with the area under the curve of the handheld fundus camera slightly lower. The sensitivity and specificity for the detection of referable DR with the handheld camera were 82.1% (95%CI: 72.1%-92.2%) and 97.4% (95%CI: 95.4%-99.5%), respectively. The performance of AI detection of DR using the Phoebus Algorithm was satisfactory; however, Phoebus showed a high sensitivity (88.2%, 95%CI: 79.4%-97.1%) and low specificity (40.7%, 95%CI: 34.1%-47.2%) when detecting referable DR. CONCLUSION: The handheld Aurora fundus camera combined with autonomous AI system is well-suited in DR screening without mydriasis because of its high sensitivity of DR detection as well as its image quality, but its specificity needs to be improved with better modeling of the data. Use of this new system is safe and effective in the detection of referable DR in real world practice.