- Introduction Diabetic retinopathy (DR) is a common vasculopathy categorized as either non-proliferative (NPDR) or proliferative (PDR),characterized by dysfunctional blood-retinal barrier (BRB) and diagnosed using fluorescein angiography (FA). Since the BRB is similar in structure and function to the blood-brain barrier (BBB) and BBB dysfunction plays a key role in the pathogenesis of brain disorders, we hypothesized that PDR, the severe form of DR, is likely to mirror BBB damage and to predict a worse neuropsychiatric outcome. Methods A retrospective cohort study was conducted among subjects with diabetes (N = 2982) with FA-confirmed NPDR (N = 2606) or PDR (N = 376). Incidence and probability to develop brain pathologies and mortality were investigated in a 10-year follow-up study. We used Kaplan–Meier, Cox and logistic regression analyses to examine association between DR severity and neuropsychiatric morbidity adjusting for confounders. Results Patients with PDR had significantly higher rates of all-cause brain pathologies (P < 0.001), specifically stroke (P = 0.005), epilepsy (P = 0.006) and psychosis (P = 0.024), and a shorter time to develop any neuropsychiatric event (P < 0.001) or death (P = 0.014) compared to NPDR. Cox adjusted hazard ratio for developing all-cause brain impairments was higher for PDR (HR = 1.37, 95% CI 1.16–1.61, P < 0.001) which was an independent predictor for all-cause brain impairments (OR 1.30, 95% CI 1.04–1.64, P = 0.022), epilepsy (OR 2.16, 95% CI 1.05–4.41, P = 0.035) and mortality (HR = 1.35, 95% CI 1.06–1.70, P = 0.014). Conclusions This is the first study to confirm that angiography-proven microvasculopathy identifies patients at high risk for neuropsychiatric morbidity and mortality.