Diabetic retinopathy is the leading cause of blindness in working-age adults. Studies have suggested that statins may reduce the risk of developing diabetic retinopathy. To investigate the association between statin therapy and the development of diabetic retinopathy in patients with diabetes and dyslipidemia. This population-based cohort study, conducted among 37 894 Taiwanese patients between January 1, 1998, and December 31, 2013, used the National Health Insurance Research Database to identify patients with type 2 diabetes and dyslipidemia. Outcomes were compared between those taking statins and those not taking statins. Statistical analysis was performed from May 1 to 31, 2018. Statin therapy with a medication possession rate of 80% or more with no other lipid-lowering medications. Any stage of diabetic retinopathy and treatments for vision-threatening diabetic retinopathy. Of 1 648 305 patients with type 2 diabetes, 219 359 were eligible for analysis over the study period, including 199 760 patients taking statins and 19 599 patients not taking statins. After propensity score matching, there were 18 947 patients in the statin group (10 436 women and 8511 men; mean SD age, 61.5 10.8 years) and 18 947 patients in the nonstatin group (10 430 women and 8517 men; mean SD age, 61.0 11.0 years), with a mean follow-up of 7.6 years for the statin group and 7.3 years for the nonstatin group. During the study period, 2004 patients in the statin group (10.6%) and 2269 patients in the nonstatin group (12.0%) developed diabetic retinopathy. Patients in the statin group had a significantly lower rate of diabetic retinopathy (hazard ratio HR, 0.86; 95% CI, 0.81-0.91), nonproliferative diabetic retinopathy (HR, 0.92; 95% CI, 0.86-0.99), proliferative diabetic retinopathy (HR, 0.64; 95% CI, 0.58-0.70), vitreous hemorrhage (HR, 0.62; 95% CI, 0.54-0.71), tractional retinal detachment (HR, 0.61; 95% CI, 0.47-0.79), and macular edema (HR, 0.60; 95% CI, 0.46-0.79) than the nonstatin group, as well as lower rates of interventions such as retinal laser treatment (HR, 0.71; 95% CI, 0.65-0.77), intravitreal injection (HR, 0.74; 95% CI, 0.61-0.89), and vitrectomy (HR, 0.58; 95% CI, 0.48-0.69), along with a smaller number of the interventions (retinal lasers: rate ratio, 0.61; 95% CI, 0.59-0.64; intravitreal injections: rate ratio, 0.68; 95% CI, 0.61-0.76; and vitrectomies: rate ratio, 0.54; 95% CI, 0.46-0.63). Statin therapy was also associated with lower risks of major adverse cardiovascular events (HR, 0.81; 95% CI, 0.77-0.85), new-onset diabetic neuropathy (HR, 0.85; 95% CI, 0.82-0.89), and new-onset diabetic foot ulcers (HR, 0.73; 95% CI, 0.68-0.78). Statin therapy was associated with a decreased risk of diabetic retinopathy and need for treatments for vision-threatening diabetic retinopathy in Taiwanese patients with type 2 diabetes and dyslipidemia.