OBJECTIVE To study the 4 years incidence of diabetic retinopathy in patients with type II diabetes and effective factors on its progression. METHODS Among diabetic patients referred to Yazd Diabetes Research Center, 120 patients with type II diabetes without diabetic retinopathy were selected. After complete ophthalmic examination, fasting blood sugar (FBS), postprandial blood sugar, triglyceride, and cholesterol were measured and height, weight, and blood pressure (BP) were recorded. Then patients were followed with eye examination yearly for 4 years. RESULTS Four-year cumulative incidence of diabetic retinopathy was 47.5% (95% CI: 38.6-56.4). The retinopathy was mild nonproliferative diabetic retinopathy (NPDR) in 43 (35.8%) whereas 10 (8.3%) patients had moderate NPDR, 3 (2.5%) patients had severe NPDR, and only one patient had proliferative diabetic retinopathy. The incidence of diabetic retinopathy was 5.8% in first year, 20.3% in the second year, 24.4% in the third year, and 7.4% in the fourth year. Duration of diabetes, FBS, and systolic BP had statistically significant relation with grades of diabetic retinopathy. However, there was no significant association between age, sex, body mass index, triglyceride, cholesterol, method of treatment, smoking, and diastolic BP with grades of diabetic retinopathy. CONCLUSIONS These data provide 4-year cumulative incidence of diabetic retinopathy in defined type 2 diabetic patients. The present study shows that duration of diabetes, hyperglycemia, and systolic BP appear to be the major factors associated with the development of any level of retinopathy in type 2 diabetic patients.