Diabetic macular edema (DME) is a significant cause of vision loss and represents an important clinical and public health problem. It is characterized by breakdown of the blood retinal barrier with fluid accumulation in the sub-retinal and intra-retinal spaces. Although several hypotheses exist for the causes of diabetic macular edema, specific molecular mechanisms remain unclear. Current thinking includes the role of vascular endothelial growth factor (VEGF) and inflammatory cytokines in vascular permeability. We review studies showing a relationship between elevated aqueous VEGF, monocyte chemoattractant protein -1, interleukin 6, or interleukin 8 in association with DME and as predictors of DME. The presence of mediators in both the angiogenesis and inflammatory pathways data suggest a multifactorial model for the development of DME. Further studies targeting individual cytokine activity will be important to our understanding of the pathogenesis and treatment.