Blood pressure variability is associated with macrovascular complications and stroke, but its association with the microcirculation in type II diabetes has not been assessed. This study aimed to determine the relationship between blood pressure variability indices and retinal arteriolar diameter in non-diabetic and type II diabetes participants. Digitized retinal images were analysed to quantify arteriolar diameters in 35 non-diabetic (aged 52 ± 11 years; 49% male) and 28 type II diabetes (aged 61 ± 9 years; 50% male) participants. Blood pressure variability was derived from 24-h ambulatory blood pressure. Arteriolar diameter was positively associated with daytime rate of systolic blood pressure variation (p = 0.04) among type II diabetes participants and negatively among non-diabetics (p = 0.008; interaction p = 0.001). This finding was maintained after adjusting for age, sex, body mass index and mean daytime systolic blood pressure. These findings suggest that the blood pressure variability–related mechanisms underlying retinal vascular disease may differ between people with and without type II diabetes.