Diabetic retinopathy is a major vision threatening disease among working age adults, and increased oxidative stress is one of the prime causative factors in its pathogenesis. Increased reactive oxygen species (ROS) in the cytosol damage mitochondria, and due to compromised antioxidant signaling system and dysfunctional mitochondria with damaged mitochondrial DNA, ROS continue to pile up, accelerating capillary cell loss. In addition to other cellular and enzymatic defense systems, the retina is also equipped with the nuclear erythroid-2-p45-related factor-2 (Nrf2) antioxidant response element signaling pathway, which controls the expression of genes important in detoxification and elimination of ROS. However, in diabetes, its transcriptional activity is impaired, further exacerbating and exposing the retina to elevated stress. Diabetic milieu also alters epigenetic factors responsible for chromatin modifications and gene regulation, and kelch-like ECH-associated protein 1 (Keap1), important in regulating Nrf2-antioxidant signaling axis, is epigenetically modified, impeding nuclear translocation of Nrf2, and this inhibits the transcription of genes with Antioxidant Response Element. This review discusses antioxidant signaling, especially the role of Nrf2, in diabetic retinopathy, and possible involvement of epigenetic modifications in antioxidant signaling and Nrf2 transcriptional activity. Therapies targeting Nrf2 activation, including epigenetic modifications, have potentional to prevent mitochondrial damage and inhibit the development, and progression of this sight-threatening disease which most of the patients get after 20–25 years of diabetes.