This review highlights the pathophysiology and pathogenesis of diabetic retinopathy, the main complication of diabetes. The Neurovascular Unit (NVU) is brought to the surface for its importance to retinal physiological function. Diabetes impairs the NVU leading to the production of causative factors, such as ischemia, oxidative stress and excitotoxicity. The interplay between members of the above triad leads to the main pathological factors of diabetic retinopathy, namely neurodegeneration, neuroinflammation and vasculopathy. Emphasis is given to the pathology of the early stage of diabetic retinopathy (ESDR) and the putative new therapeutic treatments that will prevent/delay the development of the advanced stage of DR in which vision is compromised. NADPH Oxidases (NOX1-NOX5), whose main function is to produce reactive oxygen species (ROS) and induce oxidative/nitrative stress will be presented as novel therapeutic targets for the impaired neurovascular unit. The knowledge of the molecular mechanisms involved in the neuroprotection induced by novel specific inhibitors of NOX2 and NOX4 against the diabetic insults will confer the hope that therapeutic treatments for ESDR will evolve in the near future and be beneficial to the millions of patients who are in the early stage of diabetic retinopathy, as well as patients with other complications of diabetes.