OBJECTIVE To examine the 14-year incidence and progression of diabetic retinopathy and macular edema and its relation to various risk factors. METHODS Population-based incidence study. METHODS The study was conducted in an 11-county area in southern Wisconsin. METHODS Six hundred thirty-four insulin-taking persons with diabetes diagnosed before age 30 years participated in baseline, 4-year, 10-year, and 14-year follow-up examinations. METHODS The 14-year progression of retinopathy, progression to proliferative retinopathy, and incidence of macular edema were detected by masked grading of stereoscopic color fundus photographs using the modified Airlie House classification and the Early Treatment Diabetic Retinopathy Study retinopathy severity scheme. RESULTS The 14-year rate of progression of retinopathy was 86%, regression of retinopathy was 17%, progression to proliferative retinopathy was 37%, and incidence of macular edema was 26%. Progression of retinopathy was more likely with less severe retinopathy, being male, having higher glycosylated hemoglobin or diastolic blood pressure at baseline, an increase in the glycosylated hemoglobin level, and an increase in diastolic blood pressure level from the baseline to the 4-year follow-up. Increased risk of proliferative retinopathy or incidence of macular edema was associated with more severe baseline retinopathy, higher glycosylated hemoglobin at baseline, and an increase in the glycosylated hemoglobin between the baseline and 4-year follow-up examination. The increased risk of proliferative retinopathy was associated with the presence of hypertension at baseline, whereas the increased risk of a participant having macular edema develop was associated with the presence of gross proteinuria at baseline. Lower glycosylated hemoglobin at baseline was associated with improvement in retinopathy. CONCLUSIONS These data suggest relatively high 14-year rates of progression of retinopathy and incidence of macular edema. These data also suggest that a reduction of hyperglycemia and hypertension may result in a beneficial decrease in the progression to proliferative retinopathy.