Diabetic retinopathy and diabetic macular edema (DME) remain important causes of visual loss worldwide despite the adoption of intensive glycemic control for the management of diabetes. Several interacting and mutually perpetuating abnormal biochemical systems, such as non-enzymatic glycation, protein kinase C (PKC) β activation, the polyol pathway, and oxidative stress, may be activated by sustained hyperglycemia in patients with diabetes. These abnormal systems may in turn influence several vasoactive factors, which are probably instrumental in the development of functional and morphological changes in the retina. Among the known vasoactive factors, vascular endothelial growth factor (VEGF), angiotensin II, and interleukin-6, are thought to be important in mediating the functional and structural alterations that occur in diabetic retinopathy and DME. Complex and interacting regulatory mechanisms, as well as enzyme inhibition, which are included advanced glycation end product inhibitor, PKC β inhibitor, aldose reductase inhibitor, antioxidant, angiotensin converting enzyme inhibitor, angiotensin II type 1 receptor blocker, and anti-VEGF, may modulate the ability of these molecules to produce biologically significant effects. Better understanding of these factors and their interactions should be of assistance in the development of new therapies for the treatment of diabetic retinopathy and DME.