Diabetic corneal neuropathy (DCN) and diabetic retinopathy (DR) are microvascular complications and share common pathophysiological mechanisms. However, the relationship between them remains poorly defined. In this cross-sectional study, we aimed to investigate the association among DCN, DR, and tear mediators in 1,654 eyes from 822 participants, comprising 634 patients with type 2 diabetes and 188 healthy participants. Our data demonstrated that compared with control participants, all patients with diabetes had significantly impaired corneal nerve metrics, increased dendritic cell length and density, and larger corneal microneuromas, even in the absence of DR. Patients with nonproliferative DR (NPDR) and proliferative DR (PDR) showed significantly reduced corneal nerve parameters compared with those with no DR. Furthermore, patients with PDR presented significantly worse ocular surface clinical manifestations than patients with no DR, patients with NPDR, and control participants. Cumulative link mixed models demonstrated that corneal sensitivity and corneal nerve parameters were significantly associated with the severity of DR. Tear substance P concentrations were significantly lower across all stages of DR compared with control participants. Tear MMP-9, substance P, and IGFBP-3 levels were significantly associated with corneal nerve and ocular surface parameters. This study demonstrates that DCN precedes the onset of DR and worsens with the severity of DR. Corneal nerve status could be an early indicator and predictor of DR.Article HighlightsBoth diabetic corneal neuropathy (DCN) and diabetic retinopathy (DR) are microvascular complications and share common pathophysiological mechanisms. The links between them are poorly understood.We investigated the relationship between DCN and DR by studying imaging features, clinical manifestations, and tear biomarkers.Our study demonstrated that DCN precedes the onset of DR, and DCN worsens with the severity of DR stage. Corneal sensitivity and corneal nerve parameters are significantly associated with DR severity. Tear MMP-9, substance P, and IGFBP-3 were significantly altered in DR.Corneal nerve status could be an early indicator and predictor of DR.