Diabetic Retinopathy (DR) is the leading cause of irreversible global vision loss. It affects the entire neurovascular unit of the retina, along with gradual neurodegeneration and neuroinflammation. DR has primarily been considered a microvasculature complication of diabetes, a well-known metabolic disorder. However, recent studies have reported the presence of neurodegenerative changes in the retina of DR patients prior to clinical manifestations. In this review, we have compiled clinical, histopathological, biochemical and genetic evidences that suggest a role of neurodegeneration in DR progression and pathogenesis. These studies indicated neural changes in the retina that have lead to microvascular alterations. Furthermore, the mechanisms underlying the neural changes can help identify drug targets for effective management of the disease, which in turn will help reduce the burden of visual impairments caused by DR.