AIM: To evaluate correlation of retinopathy and diabetic peripheral neuropathy (DPN) as microvascular complications of diabetes and also to identify their risk factors in patients with type 2 diabetes. METHODS: We conducted a cross-sectional study in an outpatient diabetes clinic during an 18-month period. 100 patients (51 male and 49 female), all affected by non-insulin- dependent diabetes mellitus (NIDDM), were examined for the presence of diabetic neuropathy and diabetic retinopathy. RESULTS: 78.1% of patients with retinopathy had DPN; and 79.1% of patients with DPN had retinopathy. Analysis of the association between DPN and retinopathy showed no significant correlation between them. 90.9% of patients with proliferative diabetic retinopathy (PDR) had DPN; and 27.8 % of patients with DPN had PDR. Both the univariate analysis and multiple logistic regression analysis revealed significant correlation between them (r =0.42, P =0.02). CONCLUSION: A severe diabetic retinopathy is associated with diabetic neuropathy. Our study further supports that diabetic neuropathy might be used as a tell-tale sign of diabetic retinopathy, necessitating more intensive ophthalmic care, especially in long-lasting diabetes.