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Aims: To assess the effectiveness of a non-mydriatic digital camera (45 degrees -30 degrees photographs) compared with the reference method for screening diabetic retinopathy., Methods: Type 1 and 2 diabetic patients (n = 773; 1546 eyes) underwent screening for diabetic retinopathy in a prospective observational study. Hospital-based non-mydriatic digital retinal imaging by a consultant specialist in retinal diseases was compared with slit-lamp biomicroscopy and indirect ophthalmoscopy through dilated pupils, as a gold standard, previously performed in a community health centre by another consultant specialist in retinal diseases. The main outcome measures were sensitivity and specificity of screening methods and prevalence of diabetic retinopathy., Results: The prevalence of any form of diabetic retinopathy was 42.4% (n = 328); the prevalence of sight-threatening including macular oedema and proliferative retinopathy was 9.6% (n = 74). Sensitivity of detection of any diabetic retinopathy by digital imaging was 92% (95% confidence interval 90, 94). Specificity of detection of any diabetic retinopathy was 96% (95, 98). The predictive value of the negative tests was 94% and of a positive test 95%. For sight-threatening retinopathy digital imaging had a sensitivity of 100%., Conclusions: A high sensitivity and specificity are essential for an effective screening programme. These results confirm digital retinal imaging with a non-mydriatic camera as an effective option in community-based screening programmes for diabetic retinopathy.