BACKGROUND The aim was to examine the progression and regression of diabetic retinopathy within a four-year period in a Chinese population with type 2 diabetes mellitus in a community optometry clinic in Hong Kong. METHODS During the period May 2005 to November 2009, 5,160 patients with type 2 diabetes mellitus who had attended at least two diabetic retinopathy screening sessions at a community optometry clinic were included as subjects in this study. All had retinal photographs taken of both eyes, which were of sufficiently good quality for grading. For the purpose of this study, diabetic retinopathy grading was based on the results of the worst eye. The main outcomes were the within four-year incidence of diabetic retinopathy and the incidence of progression and regression of diabetic retinopathy. RESULTS Of the 5,160 subjects in this study, 3,647 had no diabetic retinopathy, while 1,513 had diabetic retinopathy at the baseline visit. Of those 3,647 subjects with no diabetic retinopathy, the within four-year cumulative incidence of any diabetic retinopathy, mild or moderate non-proliferative diabetic retinopathy and sight-threatening diabetic retinopathy was 15.16 per cent, 14.45 per cent, 0.69 per cent and 0.03 per cent, respectively. Of those 1,513 subjects with diabetic retinopathy at baseline, the within four-year progression incidence of diabetic retinopathy was 6.61 per cent and the regression incidence of diabetic retinopathy was 45.54 per cent. CONCLUSIONS The high regression incidence of diabetic retinopathy suggests that it might not be necessary for all patients with diabetes to be screened annually. Other methods to determine the screening frequency for an individual patient should be explored.