The electroretinogram (ERG) elicited by alternating gratings at constant mean luminance (pattern ERG) is a focal response reflecting the activity of the directly stimulated retinal area. In addition, pattern ERG is related, unlike the flash ERG, to ganglion cell activity. Therefore, this technique may be used to evaluate the integrity of inner retinal layers in the macular region. In this study, the steady-state pattern ERG, in response to alternating gratings (1.7 cycles/deg spatial frequency; 9 degrees field size) temporally modulated at 8 Hz, was recorded in 42 type I (insulin-dependent) diabetic patients with zero to four microaneurysms on fluorescein angiography and a duration of disease less than 11 yr. No patient had concomitant ocular or systemic complications. Mean pattern-ERG amplitude was significantly reduced in patients compared with age-matched control subjects (analysis of variance, F = 25.6, P less than 0.0001). Significant differences were observed between control and diabetic subjects without retinopathy (Scheffé F test, P less than 0.0001), between control and retinopathic subjects (Scheffé F test, P less than 0.0001), and between diabetic patients without retinopathy and those with early retinopathy (Scheffé F test, P less than 0.02). Pattern-ERG amplitude was inversely correlated with duration of diabetes (r = 0.22, P less than 0.05). Our results suggest a macular dysfunction in early diabetes resulting from metabolic and/or vascular injuries in the neurosensory retina.