OBJECTIVE This study sought to investigate the progression and regression of diabetic retinopathy (DR) and the effects of population risk factors on the rates of transition across retinopathy stages. RESEARCH DESIGN AND METHODS The study cohort consisted of 44,871 observed DR events between the calendar years 1990 and 2011 for 4,758 diabetic patients who were diagnosed at 35 years of age or older. The first retinal observation was recorded within a year from diagnosis, and the result was recorded as free of retinopathy. A multistate Markov model was applied for analyzing the development of DR and its relation to the patterns of changes in risk factors. RESULTS We observed a consistent risk effect of HbA1c on the progression (no retinopathy to mild background DR [BDR] hazard ratio per SD of HbA1c [HR] 1.42 [95% CI 1.32-1.52], mild BDR to observable BDR HR 1.32 [95% CI 1.08-1.60], and observable BDR to severe nonproliferative/proliferative DR HR 2.23 [95% CI 1.16-4.29]). Similarly, systolic blood pressure (SBP) and diastolic blood pressure increased the risk for the transition from the asymptomatic phase to mild BDR (HR 1.20 [95% CI 1.11-1.30]) and the mild BDR to observable BDR (HR 1.87 [95% CI 1.46-2.40]), respectively. Regression from mild BDR to no DR was associated with lower SBP (HR 0.79 [95% CI 0.64-0.97]) and lower HbA1c (HR 0.76 [95% CI 0.64-0.89]). CONCLUSIONS Progression and regression of DR were strongly associated with blood pressure and glycemic exposure.