BACKGROUND Worldwide the incidence of diabetes and its complications is increasing in leaps and bounds. Our aim is to study the prevalence of diabetic retinopathy in outpatients presenting with cataract in the Department of Ophthalmology in a tertiary care hospital. METHODS All patients who had cataract were screened from January 2015 to June 2016 and patients with diabetic retinopathy were included in the study. RESULTS In our study 40% were found to have diabetic retinopathy of various stages. There is a significant association of NPDR with respect to CSME and there is highly significant association (p<0.01) of disease progression to advanced diabetic eye disease after the disease enters the PDR stage. CONCLUSIONS The more severe the diabetic retinopathy, the worse is the visual prognosis. In cataract patients, early detection and prompt treatment of retinal diseases like diabetic retinopathy can prevent their progression and there by improve the visual outcome following cataract surgery.