Aldose reductase has been implicated in two histopathological hallmarks of diabetic retinopathy involving retinal capillary walls: 1) the selective loss in numbers of mural cells (intramural pericytes) from the capillaries; and 2) the thickening of the basement membranes which envelop the cells of the capillary walls. Mural cells contain aldose reductase, accumulate sorbitol, and appear to be more susceptible to incubation in high glucose than are endothelial cells. A thickening of capillary basement membrane ultrastructurally similar to that characteristic of diabetic retinopathy was induced in rat retinas by galactose feeding and was prevented by two structurally different inhibitors of aldose reductase. The diabetic-like thickening of retinal capillary basement membranes in galactose-fed rats was accompanied by other ultrastructural alterations mimicking changes typical of diabetic microangiopathy, such as multilamination, banding of collagen, and the formation of vacuoles and dense inclusions. Bovine, canine, and human mural cells and endothelial cells from retinal capillaries have been grown in cell culture so that the role of aldose reductase in basement membrane synthesis and in various complications of the diabetic state could be studied under chemically defined conditions. Aldose reductase inhibitors are useful for studies of the possible prevention of diabetic retinopathy by oral drugs.