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Objective: The objective of this study was to examine the effect of intensive glycemic control (INT) and higher pancreatic insulin reserve (assessed by plasma C-peptide), lipid particles, or coagulation factors are associated with better eye outcomes in patients with poorly controlled, advanced type 2 diabetes (T2DM) Methodology: The veteran’s affairs diabetes trial (VADT) was an open-label, prospective, randomized controlled trial to test the effect of standard glycemic control (STD) compared with INT on cardiovascular events in patients with T2DM. Diabetic retinopathy (DR) outcomes were also collected. Incidence and progression of DR were assessed by grading seven-field stereoscopic fundus photographs at baseline and 5 years later taken in 858 of a total of 1,791 participants who completed both eye examinations. Results & Conclusion: Assignment to INT was not independently associated with decreased risk of onset and progression of DR. Poor glucose control at baseline was associated with an increased risk of progression of DR. INT was associated with a decreased incidence of DR in younger patients but with an increased risk of DR in older patients. Higher C-peptide at baseline was associated with reduced incidence and progression of DR. INT was associated with decreased odds of progression but not with onset of DR in those with worse lipid levels at baseline and more improved lipid levels during the study. Higher HDL-C was consistently associated with better eye outcome INT group. Furthermore, higher level of PAI-1 at baseline was an independent risk factor for onset of DR, while subjects in group with lower baseline fibrinogen had decreased chance of progression of DR.