Ten years after the foundation of a national diabetic eye screening program in 1980, we have established a low prevalence of blindness and partial sight in type 1 and type 2 diabetics in Iceland. We ask whether the screening program is also associated with a low incidence of blindness in diabetics. We now report the results of a prospective study on the 4-year incidence of diabetic retinopathy and visual impairment in type 1 diabetics with age at onset less than 30 years. Out of 205 patients participating at baseline, 175 patients (85.4%) participated over the full 4-year period. Patients were examined annually and received laser treatment according to Diabetic- and Early Treatment Diabetic Retinopathy Study criteria. The 4-year incidence of any retinopathy was 38.1%, of proliferative retinopathy 6.6%, and of macular edema 3.4%. Out of 174 patients, 7.4% showed improvement in visual acuity of 2 Snellen lines while 2.5% experienced worsening of visual acuity of 2 Snellen lines during the 4-year period. No diabetic suffered more than 2 lines deterioration of vision and none became legally blind. The incidence of retinopathy in Icelandic type 1 diabetics participating in our annual eye screening program is low and the visual acuity stable. Our results suggest that visual impairment in diabetics can be prevented with active regular screening and standard laser therapy.