Retinal neovascularization and macular edema are central features of diabetic retinopathy, the major cause of blindness in the developed world. Current treatments are limited in their efficacy and are associated with significant adverse effects. Characterization of the molecular and cellular processes involved in vascular growth and permeability has led to the recognition that the angiogenic growth factor and vascular permeability factor vascular endothelial growth factor (VEGF) plays a pivotal role in the retinal microvascular complications of diabetes. Therefore, VEGF represents an exciting target for therapeutic intervention in diabetic retinopathy. This review highlights the current understanding of the mechanisms that regulate VEGF gene expression and mediate its biological effects and how these processes may become altered during diabetes. The cellular and molecular alterations that characterize experimental models of diabetes are considered in relation to the influence of high glucose-mediated oxidative stress on VEGF expression and on the mechanisms of VEGF's actions under hyperglycemic induction. Finally, potential therapeutic strategies for preventing VEGF overexpression or blocking its pathological effects in the diabetic retina are considered.