Diabetes can cause damage to small blood vessels throughout the body, including the eye's retina. The retina is the delicate nerve tissue lining the inside of the eye. The retina is the structure in the back of the eye, that receives the image we see, which is transmitted to the brain through the optic nerve. Diabetic Retinopathy is the name of the condition that affects the eyes of diabetic patients, and is caused by the deterioration of blood vessels in the retina. Read More.