The aim of this study was to evaluate the incidence of and risk factors for the development of diabetic retinopathy (DR) and progression to proliferative DR (PDR) in Korean patients. Patients diagnosed with type 2 diabetes and followed for more than 5 years at a university-based clinic since 2000 were consecutively enrolled in this retrospective cohort study. Based on the DR classification at the initial and final visits, the incidence and progression of DR was determined and patient characteristics were compared according to DR progression. Hazard ratios of each putative risk factor for DR progression were calculated with a multivariate Cox proportional hazard model. Rate of DR development and progression to PDR were 32.1/1,000 and 26.2/1,000 person-years, respectively. A longer duration of diabetes and higher mean HbA1c level were significant risk factors for the development of DR. Regarding progression to PDR, higher mean HbA1c level, higher standard deviation of HbA1c, and higher urine albumin-to-creatinine ratio were significant risk factors. The rates of development of DR and progression to PDR in Koreans with type 2 diabetes are lower than those reported over the last decade. An inadequate blood glycemic control is the common risk factor for development and progression of DR.