Purpose: To investigate the relationship between microalbuminuria and the presence and severity of diabetic retinopathy in a large population-based cohort of individuals with diabetes. Methods: Microalbuminuria was measured by an agglutination inhibition assay in random urine samples obtained from participants in the Wisconsin Epidemiologic Study of Diabetic Retinopathy (n = 1139) who did not have hematuria, gross proteinuria, or a history of renal disease. Retinopathy was determined from stereoscopic color fundus photographs graded according to a modification of the Airlie House Classification System. Results: Younger-onset (diagnosed with diabetes before 30 years of age) and older-onset (diagnosed with diabetes when 30 years of age or older) individuals with microalbuminuria were more likely to have retinopathy than those without microalbuminuria. Younger-onset individuals who had microalbuminuria at the time of examination were more likely to have proliferative retinopathy than younger-onset subjects with normoalbuminuria. These relationships remained after controlling for glycemia, hypertension, duration of diabetes, and other potential confounders. Conclusions: Microalbuminuria is associated cross-sectionally with the presence of retinopathy in persons with diabetes and with the presence of proliferative disease in younger-onset individuals. These data suggest that microalbuminuria may be a marker for the risk of proliferative retinopathy developing. If longitudinal studies confirm these findings, individuals with insulin-dependent diabetes mellitus (IDDM) who have microalbuminuria may benefit from ophthalmologic follow-up.