Diabetic macular edema can be classified into a focal variety, characterized by focal leakage from microaneurysms, often with accumulation of extravascular lipoprotein in a circinate pattern around the focal leakage, and a diffuse variety, with diffuse leakage from retinal vessels often accompanied by cystoid macular changes. Laser photocoagulation is directed at microaneurysms for focal leakage and is applied in a grid pattern for diffuse leakage. Several prospective randomized clinical trials have shown that laser-treated eyes fare better than untreated eyes: there is a higher rate of modest visual improvement and a lower rate of visual deterioration in eyes treated with laser photocoagulation. In patients with diabetic macular edema, especially the diffuse variety, systemic factors also may play a pathogenic role. Fluid retention and hypertension due to cardiovascular and renal disease exacerbate retinal capillary leakage. Correction of systemic abnormalities (reduced blood pressure, diuresis) may reduce macular edema and should be included as part of the total management of patients with diabetic macular edema.