Abstract. Purpose: To assess the relationship between visual acuity (VA) and diabetic macular oedema (DMO) in relation to the location of retinal thickening and the severity and duration of central macular thickening. Methods: Data from 584 eyes in 340 placebo-treated patients in the 3-years-long Protein Kinase C Diabetic Retinopathy Study (PKC-DRS2) trial were used to investigate the relationship between VA and DMO. Eligible eyes had moderately severe to very severe non-proliferative diabetic retinopathy and VA of at least 45 letters on Early Treatment Diabetic Retinopathy Study (ETDRS) charts (Snellen equivalent = 20/125). Diabetic retinopathy and DMO status were assessed using stereo photographs. Results: Nearly one third of study eyes had foveal centre-involving DMO at the start of the trial. Sustained moderate visual loss was found in 36 eyes, most commonly associated with DMO at the centre of the fovea in 73% of eyes. There was a strong relationship (p < 0.001) between foveal centre involvement with DMO and mean VA. Mean VA decreased with increasing retinal thickness at the centre (p < 0.001) and increasing duration of centre-involving DMO (p < 0.001). Conclusion: This study documents the relationship between duration of DMO and progressive vision loss, and the key role of central foveal involvement in patients with diabetic retinopathy. These data will help to develop future strategies to prevent vision loss.