Introduction: The main objectives of this study was to find out the association between hyperlipidemia and diabetic retinopathy and the psychosocial impact in diabetic patients. Method: In a single center observational study, we had recruited 70 patients. Out of them, 35 patients had diabetes but no evidence of retinopathy and 35 patients had diabetic retinopathy .We correlated the findings with the age, sex and duration of DM along with its severity. We also tried to find an association, of serum lipids and the psychosocial impact of diabetes in these diabetic patients. Results: During the study, we found that with increase in the duration of diabetes the risk of diabetic retinopathy was also on the rise. TC, TG, LDL were also found to be higher in patients with diabetic retinopathy as compared to patients with no diabetic retinopathy. Psychosocial analysis of these patients showed no significant impact in either group. Conclusion: Our conclusion from the study was that that poor glycemic control, increase duration of diabetes and high levels of serum lipids are high risk factors for the development of diabetic retinopathy.