Blood flow in the retina increases in response to light-evoked neuronal activity, ensuring that retinal neurons receive an adequate supply of oxygen and nutrients as metabolic demands vary. This response, termed "functional hyperemia," is disrupted in diabetic retinopathy. The reduction in functional hyperemia may result in retinal hypoxia and contribute to the development of retinopathy. This review will discuss the neurovascular coupling signaling mechanisms that generate the functional hyperemia response in the retina, the changes to neurovascular coupling that occur in diabetic retinopathy, possible treatments for restoring functional hyperemia and retinal oxygen levels, and changes to functional hyperemia that occur in the diabetic brain.