The aim of this study was to evaluate the usefulness of visual evoked potential (VEP) testing in detecting retinal ganglion cell damage in patients with Diabetes Mellitus type I (DMI). VEP arise before diabetic retinopathy signs become ophthalmoscopically detectable. VEP testing was performed in 45 patients divided into three groups; 15 children with recently discovered DMI, 15 children with long-lasting DMI, and 15 healthy children as the control group. A statistically significant difference in VEP P100 wave amplitudes (Z = 4.02, p < 0.001) and latencies (Z = -4.66, p < 0.001) was found between children with established DMI and those with recently discovered DMI. Amplitude values decrease progressively and latency values increase progressively in children with DMI as the years pass. Progressive increases in VEP latency values are a direct sign of retinal ganglion cell damage, which takes place even before the first ophthalmoscopically detectable signs of diabetic retinopathy arise. Therefore, VEP should be considered as a valid method for detecting prediabetic retinopathy, which could contribute greatly to the prevention of diabetic retinopathy complications.