OBJECTIVE To determine the relationship of change in the number of retinal microaneurysms to the 10-year progression to significant retinopathy, proliferative retinopathy, and clinically significant macular edema. METHODS Population-based study of persons with younger- and older-onset diabetes with 10 years of follow-up. METHODS Eleven-county area in southern Wisconsin, where 189 patients with diabetes who had only retinal microaneurysms in photographs at baseline participated in 4- and 10-year follow-up examinations. METHODS Ten-year incidence of moderate nonproliferative diabetic retinopathy or worse, proliferative retinopathy, or clinically significant macular edema as determined by masked grading of stereoscopic color fundus photographs of seven standard fields. RESULTS The increase in the number of retinal microaneurysms and the ratio of the number of retinal microaneurysms at the 4-year follow-up to the number at baseline were positively associated with incidence of proliferative retinopathy or clinically significant macular edema at the 10-year follow-up. Proliferative retinopathy was approximately 4.6 times and clinically significant macular edema was approximately 9.1 times more likely to develop at 10-year follow-up in eyes in which the number of microaneurysms increased by 16 or more from baseline to the 4-year follow-up than in eyes with no increase. Proliferative retinopathy was 3.4 times and clinically significant macular edema was 6.7 times more likely to develop at 10-year follow-up in eyes that had ratios of 3 or greater of the number of retinal microaneurysms at the 4-year follow-up to the number at baseline than in eyes in which the ratios were smaller. These relationships remained after controlling for the level of glycosylated hemoglobin and type of diabetes. CONCLUSIONS Microaneurysm counts using stereoscopic color fundus photographs are an early important measure of progression of retinopathy and may serve as a surrogate end point for severe change in some clinical trials.