Aim: Diabetic retinopathy (DR) is an emerging cause of blindness in developing countries. This study aimed to explore the prevalence and risk factors of DR in an elderly population in Nepal. Subjects and methods: This is a population-based, cross-sectional study. A total of 1860 subjects at the age 60 years and above participated (response rate 88.6%). A detailed history was obtained, presenting and best-corrected visual acuity were measured, and anterior segment and posterior segment examinations were carried out. Blood pressure and random blood sugar were recorded; body mass index was calculated, and abdominal girth was measured. DR was graded by clinical examination using Early Treatment Diabetic Retinopathy Study criteria. Results: Diabetes was found in 168 (9%) subjects (mean age 69.6 years), 31 (18.5%) of whom were newly diagnosed. The prevalence of DR was 23.8% (95% confidence interval [CI]: 17.7%–31%) among the persons with diabetes. The prevalence of DR among newly diagnosed subjects with diabetes was 6.5% (95% CI: 0.8%–21.4%). The prevalence of vision-threatening DR was 9.5% (95% CI: 5.5%–15%) and was higher in males. The prevalence of DR was 83.3% (95% CI: 35.9%–99.6%) among those with diabetes for over 20 years. In multivariable logistic regression analysis, duration of diabetes, hypertension, and alcohol consumption were significantly associated with DR. Conclusion: DR is a common problem among the elderly population with diabetes in Nepal. The duration of diabetes, hypertension, and alcohol consumption are the risk factors for the development of DR. Strategies have to be developed for timely diagnosis of diabetes and screening for DR.