Diabetic retinopathy is characterized by blood-retinal barrier (BRB) breakdown and neurotoxicity. These pathologies have been associated with oxidative stress and proinflammatory cytokines, which may operate by activating their downstream target p38 MAP kinase. In the present study, the protective effects of a nonpsychotropic cannabinoid, cannabidiol (CBD), were examined in streptozotocin-induced diabetic rats after 1, 2, or 4 weeks. Retinal cell death was determined by terminal dUTP nick-end labeling assay; BRB function by quantifying extravasation of bovine serum albumin-fluorescein; and oxidative stress by assays for lipid peroxidation, dichlorofluorescein fluorescence, and tyrosine nitration. Experimental diabetes induced significant increases in oxidative stress, retinal neuronal cell death, and vascular permeability. These effects were associated with increased levels of tumor necrosis factor-α, vascular endothelial growth factor, and intercellular adhesion molecule-1 and activation of p38 MAP kinase, as assessed by enzyme-linked immunosorbent assay, immunohistochemistry, and/or Western blot. CBD treatment significantly reduced oxidative stress; decreased the levels of tumor necrosis factor-α, vascular endothelial growth factor, and intercellular adhesion molecule-1; and prevented retinal cell death and vascular hyperpermeability in the diabetic retina. Consistent with these effects, CBD treatment also significantly inhibited p38 MAP kinase in the diabetic retina. These results demonstrate that CBD treatment reduces neurotoxicity, inflammation, and BRB breakdown in diabetic animals through activities that may involve inhibition of p38 MAP kinase.