BACKGROUND:Currently 93 million people are estimated as living with diabetic retinopathy worldwide. The prevalence and risk factors of diabetic retinopathy in developed countries have been well documented; but in Ethiopia, data on prevalence and associated factors of diabetic retinopathy is lacking. OBJECTIVE:To determine prevalence and factors associated with development of diabetic retinopathy among diabetic patients at Arbaminch General Hospital, Ethiopia. METHOD:Cross-sectional study design with record review of 400 diabetic patients was conducted at Arbaminch General Hospital from November to January 2015. Among 400 diabetic patients, 270 patients with baseline information and without history of hypertension at baseline were included in this study. But patients with gestational diabetes and with retinopathy at baseline were excluded from the study. Consecutive sampling technique was applied to select study participants. Data of cohorts was extracted from medical record using pre tested structured extraction check list. Data cleaning, coding, categorizing, merging and analysis carried out by STATA version 12. Descriptive statistics was done and presented accordingly. Bivariate binary logistic regression analysis was done to select potential candidates for the full model at P-value cutoff point ≤ 0.25 and multivariable binary logistic regression analysis was made to estimate the independent effect of predictors on the occurrence of diabetic retinopathy. Model diagnostic tests were done, final model fitness was checked using Hosmer and Lemeshow chi square test. Finally, statistical significance was tested at P-value <0.05. RESULT:Prevalence of diabetic retinopathy among diabetic patients at Arbaminch General Hospital was 13%. Adjusted analysis showed that the odds of diabetic retinopathy were statistically and significantly associated with baseline age (AOR = 6.06: 95%CI; 2.42, 15.21), baseline systolic blood pressure level (AOR = 4.38: 95%CI; 1.64, 11.68), family history of diabetes (AOR = 0.22: 95%CI; 0.08, 0.58) and duration of diabetes (AOR = 8.84: 95%CI; 3.56, 12.89). CONCLUSION AND RECOMMENDATION:In the current study, prevalence of diabetic retinopathy was 13%. Since baseline age ≥60 years, baseline systolic blood pressure level >140 mmhg, duration of diabetes ≥6 years and patients with family history of diabetes were statistically and significantly related with diabetic retinopathy, special care should be given in addition to routine care.