OBJECTIVE The purpose of this study was to determine whether oral pentoxifylline would improve retinal microvascular hemodynamics and blood rheology in patients with diabetes. METHODS Patients were enrolled in a double-masked, placebo-controlled trial of pentoxifylline at 2000 mg/d. Retinal capillary blood velocity and leukocyte density, filterability, viscosity, and fibrinogen content were measured by the blue-field entoptic phenomenon simulation, filtration, rotational viscosimetry, and heat precipitation techniques, respectively, before, during, and after drug therapy. RESULTS Treatment with pentoxifylline resulted in a 23.2%, 26.8%, and 37.8% increase in capillary blood flow velocity at 1, 2, and 3 months of therapy, respectively, with a return to pretreatment baseline levels 1 month after cessation of therapy. There were no apparent effects on the remaining variables during treatment. CONCLUSIONS Pentoxifylline increases retinal capillary blood flow velocity in patients with diabetes.