This study investigated rates of diabetic retinopathy in 458 (67.5% of eligible) randomly selected household survey participants with known diabetes (168 Europeans, 144 Mäori, 149 Pacifica people). Type 2 diabetes was associated with significantly higher rates of moderate or more severe retinopathy in Mäori and Pacifica people, compared with Europeans (12.9% and 15.8% vs 4.0%, respectively). No such ethnic differences were seen for overall rates of retinopathy and macular disease. Pacifica ethnicity was associated with a significantly higher rate of cataracts (36.6% vs 19.3% for Europeans and 16.4% for Mäori). After adjusting for diabetes duration and ethnicity, patients with type 1 diabetes were over 5 times more likely to develop moderate or more severe retinopathy. While Mäori and Pacifica people with type 2 diabetes were more hyperglycaemic, with higher systolic and lower diastolic blood pressure, logistic regression analysis revealed that moderate or more severe retinopathy was associated with diabetes duration, insulin therapy, ethnicity and the extent of renal disease, but not glycaemia. Long-standing hyperglycaemia may explain the higher rates of moderate and more severe retinopathy in Mäori and Pacifica people than in Europeans, suggest the authors.