Aims/hypothesis The aim of our study was to identify subgroups of patients attending the Scottish Diabetic Retinopathy Screening (DRS) programme who might safely move from annual to two yearly retinopathy screening. Methods This was a retrospective cohort study of screening data from the DRS programme collected between 2005 and 2011 for people aged ≥12 years with type 1 or type 2 diabetes in Scotland. We used hidden Markov models to calculate the probabilities of transitions to referable diabetic retinopathy (referable background or proliferative retinopathy) or referable maculopathy. Results The study included 155,114 individuals with no referable diabetic retinopathy or maculopathy at their first DRS examination and with one or more further DRS examinations. There were 11,275 incident cases of referable diabetic eye disease (9,204 referable maculopathy, 2,071 referable background or proliferative retinopathy). The observed transitions to referable background or proliferative retinopathy were lower for people with no visible retinopathy vs mild background retinopathy at their prior examination (respectively, 1.2% vs 8.1% for type 1 diabetes and 0.6% vs 5.1% for type 2 diabetes). The lowest probability for transitioning to referable background or proliferative retinopathy was among people with two consecutive screens showing no visible retinopathy, where the probability was <0.3% for type 1 and <0.2% for type 2 diabetes at 2 years. Conclusions/interpretation Transition rates to referable diabetic eye disease were lowest among people with type 2 diabetes and two consecutive screens showing no visible retinopathy. If such people had been offered two yearly screening the DRS service would have needed to screen 40% fewer people in 2009. Electronic supplementary material The online version of this article (doi:10.1007/s00125-013-2928-7) contains peer reviewed but unedited supplementary material, which is available to authorised users.