Diagnosis of retinal vascular diseases depends on ophthalmoscopic findings that most often occur after severe visual loss (as in vein occlusions) or chronic changes that are irreversible (as in diabetic retinopathy). Despite recent advances, diagnostic imaging currently reveals very little about the vascular function and local oxygen delivery. One potentially useful measure of vascular function is measurement of hemoglobin oxygen content. In this paper, we demonstrate a novel method of accurately, rapidly and easily measuring oxygen saturation within retinal vessels using in vivo imaging spectroscopy. This method uses a commercially available fundus camera coupled to two-dimensional diffracting optics that scatter the incident light onto a focal plane array in a calibrated pattern. Computed tomographic algorithms are used to reconstruct the diffracted spectral patterns into wavelength components of the original image. In this paper the spectral components of oxy- and deoxyhemoglobin are analyzed from the vessels within the image. Up to 76 spectral measurements can be made in only a few milliseconds and used to quantify the oxygen saturation within the retinal vessels over a 10-15 degree field. The method described here can acquire 10-fold more spectral data in much less time than conventional oximetry systems (while utilizing the commonly accepted fundus camera platform). Application of this method to animal models of retinal vascular disease and clinical subjects will provide useful and novel information about retinal vascular disease and physiology.