Monocyte chemoattractant protein-1 (MCP-1) and cathepsin-D are progressively raised in type 2 diabetes mellitus (T2DM) with both non proliferative and proliferative retinal disease. This study aimed to evaluate the effect of antidiabetic medications on MCP-1 and cathepsin-D. 60 patients of T2DM without retinopathy and 60 of diabetic retinopathy were enrolled to receive metformin (500 mg–1000 mg) combined with either glimepiride (1 mg–2 mg) or insulin. The effect of antidiabetic medications on serum MCP-1 and cathepsin-D was assessed. Mean MCP-1 (pg/ml) and cathepsin-D (ng/ml) levels were significantly lower in patients of T2DM with and without retinopathy treated with metformin + insulin (468.52 ± 272.84 vs 234.30 ± 180.58; p < 0.01 and 460.15 ± 128.52 vs 517.33 ± 213.49; p = 0.214) as compared to patients treated with metformin + glimepiride (1434.02 ± 105.27 vs 1256.27 ± 76.76; p < 0.01 and 1689.36 ± 752.57 vs 919.69 ± 675.05; p = < 0.01). No significant correlation of MCP-1 and cathepsin-D with HbA1c, fasting and post prandial blood glucose were found. Patients treated with metformin and insulin combination had lower serum MCP-1 and cathepsin-D levels which suggests that this combination may be more effective in reducing the progression of diabetic retinopathy. (CTRI/2018/05/013601).