OBJECTIVE Neurodegeneration as an early event of diabetic retinopathy preceding clinically detectable vascular alterations is a widely proven issue today. While there is evidence for the impairment of color vision and contrast sensitivity in early diabetes, suggesting deteriorated photoreceptor function, the underlying neuropathology of these functional alterations is still unknown. The aim of the present study was to investigate the effects of early diabetes on the outer retinal cells. METHODS The retinal pigment epithelium, photopigment expression, and density and morphology of photoreceptors were studied using immunocytochemistry in streptozotocin-induced diabetes in two rat strains. The fine structure of photoreceptors and pigment epithelium was also investigated with transmission electron microscopy. RESULTS Here we found that retinal thickness was unchanged in diabetic animals and that no significant increase in the number of apoptotic cells was present. Although the density of cones expressing middle (M)- and shortwave (S)-sensitive opsins was similar in diabetic and control retinas, we detected remarkable morphologic signs of degeneration in the outer segments of diabetic rods, most M-cones, and some S-cones. A decrease in thickness and RPE65 protein immunoreactivity of the pigment epithelium were evident. Furthermore, an increased number of dual cones, coexpressing both M- and S-opsins, was detected at the peripheral retina of diabetic rats. CONCLUSIONS Degenerative changes of photoreceptors and pigment epithelium shown here prior to apoptotic loss of photoreceptors may contribute to functional alterations reported in diabetic human patients and different animal models, thus may serve as a potential model for testing the efficacy of neuroprotective agents in diabetes.