The aim of this study was to assess the correlation between cerebral vasomotor reactivity (CVR) and the grade of diabetic retinopathy. A total of 43 diabetic patients with matched severity of diabetic retinopathy between their right and left eyes were included in this study. Diabetic retinopathy was graded in three groups. Right and left middle cerebral artery CVR was assessed by the breath-holding index (BHI) using transcranial Doppler ultrasound (TCD). The mean age of the patients was 56.51 ± 9.34 years with a mean duration of having diabetes mellitus of 14.49 ± 8.06 years. Diabetic retinopathy was graded as mild, moderately severe, and severe in 27.9%, 34.9%, and 37.2% of the patients, respectively. The grade of diabetic retinopathy was associated with the HbA1c level (p <.049), microalbuminuria (p <.024), and BHI (p =.001). In patients with severe diabetic retinopathy, the right-sided BHI was significantly lower as compared to those with mild or moderately severe retinopathy (p =.001 and p =.008, respectively). The left-sided BHI value in patients with severe diabetic retinopathy was significantly lower as compared to those with mild or moderately severe retinopathy (p =.001 and p =.012, respectively). In subjects with moderately severe diabetic retinopathy, both-sided BHI was significantly reduced compared to those with mild retinopathy (p =.001). Our results indicate that the grade of diabetic retinopathy was associated with impaired CVR.