Background and objective Obstructive sleep apnea (OSA) and type 2 diabetes mellitus (T2DM) commonly coexist. Both could be associated with a number of pathophysiological derangements involved in the development of diabetic retinopathy (DR). So, the aim of this study was to assess the possible association between OSA and DR. Patients and methods This is a cross-sectional observational study that was conducted on patients with T2DM. Two-field 45°-digital retinal images for each eye were used to evaluate DR and graded according to the English National Screening Program guidelines. OSA was evaluated on the basis of an inpatient overnight sleep study (polysomnography) using a computerized polysomnogram device. Results This work recruited 110 patients. OSA was observed in 60% (66 patients). OSA was found to be independently associated with both advanced DR [preprolifrative (R2) or proliferative (R3)] (odds ratio=6.29; 95% confidence interval: 1.08–6.65; P=0.04) and maculopathy (odds ratio=12.92; 95% confidence interval: 3.97–4.79; P<0.001). Moreover, OSA severity was directly related to DR grade (r=0.5, P<0.001). Conclusion OSA was independently associated with advanced DR and maculopathy in T2DM patients. Moreover, severity of OSA was directly related to DR grade.