In patients with diabetes, the hyperglycaemia is known to promote high levels of diacylglycerol which activates protein kinase C (PKC) in the vascular tissues and leads to production of vascular endothelial growth factor (VEGF) in the retina. PKC activation is likely to play a key role in diabetic microvascular complications, particularly changes in vascular permeability and ischaemia in the retina. A new potential therapeutic agent, the PKC-beta inhibitor ruboxistaurin, has been studied in animal and human clinical trials in diabetic microvascular disease, particularly in patients with diabetic retinopathy. The mechanism of action of PKC and the results of these trials are discussed in this review. Ruboxistaurin shows promise as an oral treatment for diabetic retinopathy. The trials have demonstrated a significant reduction in visual loss and need for laser treatment in patients with moderate to severe diabetic retinopathy over a 3-year period. There have been no significant concerns over safety or the side-effects profile in the clinical trials. Ruboxistaurin currently has approvable status pending further randomized trials defined by the US Food and Drug Administration (FDA).