Purpose: The study is aiming at investigating the correlation between vascular endothelial growth factor (VEGF) as an angiogenic factor and diabetic retinopathy in type 2 diabetic patients and the effect of panretinal coagulation and glycemic control on VEGF. Methods: The study included 30 patients of type 2 diabetes, 10 of them did not suffer from any of the vascular complications of type 2 diabetes mellitus (group 1), 10 patients had nonproliferative diabetic retinopathy (group 2), 10 patients had proliferative diabetic retinopathy (PDR) (group 3) and (group 4), as well as 10 healthy subjects that served as control group. All participants were subjected to complete clinical examination including ophthalmic and medical examination, laboratory investigations comprising complete blood count, liver function test, serum creatinine, 24-hour urinary albumin excretion, lipid profile, fasting and 2-hour postprandial blood glucose, HbA1C and serum VEGF. Results: The study reported a highly significant increase in the serum VEGF in the diabetic patients compared to the control group (p < 0.001), and there was also a highly significant increase in the serum VEGF in the patients with PDR versus nonproliferative diabetic retinopathy (40.55 ± 8.28 vs. 20.3 ± 2.45, p < 0.001). There was a reduction in the serum VEGF in a group of diabetic patients with poor glycemic control when their diabetic state corrected through 4 months of follow-up was highly significant (17.29 ± 1.61 before vs. 9.39 ± 0.82 after control p < 0.001) as well as the reduction in the serum VEGF which was observed in a group of patients with PDR when proper panretinal photocoagulation (PRP) was applied to their retinae with 4 months of follow-up (40.55 ± 8.28 before vs. 21.15 ± 1.76 after PRP, p < 0.001). Conclusion: Serum VEGF is significantly increased in diabetic patients, especially those with PDR, and this elevation of VEGF was reduced in uncontrolled diabetic patients with proper gycemic control, and in patients with PDR with proper PRP, indicating that VEGF is an angiogenic factor that reflects the degree of neovascularization in diabetic complications.