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Diabetic retinopathy (DR) has been classically considered a microcirculatory disease of the retina. However, there is growing evidence to suggest that retinal neurodegeneration is also an early event in the pathogenesis of DR. Citicoline has been successfully used as a neuroprotective agent in the treatment of glaucoma but their effects on DR remain to be elucidated. On this basis, the main aim of the present study was to evaluate the effect of topical administration of citicoline in liposomal formulation on retinal neurodegeneration in db/db mouse and to investigate the underlying mechanisms of action. The treatment (citicoline or vehicle) was topically administered twice daily for 15 days. Retinal analyses were performed in vivo by electroretinography and ex vivo by using Western blot and immunofluorescence measurements. We found that the liposomal formulation of citicoline prevented glial activation and neural apoptosis in the diabetic retina. The main mechanism implicated in these beneficial effects were the inhibition of the downregulation of synaptophysin and its anti-inflammatory properties by means of preventing the upregulation of NF-κB and TNF-α (Tumor Necrosis Factor α) induced by diabetes. Overall, these results suggest that topical administration of citicoline in liposomal formulation could be considered as a new strategy for treating the early stages of DR.