Diabetes mellitus (DM) is a highly prevalent complex genetic disorder. There has been a worldwide effort in the identification of susceptibility genes for DM and its complications, and the 5-10-methylenetetrahydrofolate reductase (MTHFR) and apolipoprotein-E (APOE) genes have been considered good candidate susceptibility genes to this condition. The objectives of the present study were to determine if the 677T MTHFR and epsilon2/epsilon3/epsilon4 APOE alleles are risk factors for DM and for severity of diabetic retinopathy (DR). A total of 248 individuals were studied: 107 healthy individuals and 141 diabetic patients (46 with type 1 diabetes and 95 with type 2 diabetes), who also had DR (81 with non-proliferative DR and 60 with proliferative DR). The polymorphisms were analyzed by PCR followed by digestion with restriction enzyme or the single-nucleotide primer extension method. No evidence of association between the 677TT genotype of MTHFR gene and DM [cases: TT = 10/95 (10.6%); controls: TT = 14/107 (13%)] or with severity of DR was observed [cases: TT = 5/60 (8.5%); controls: TT = 9/81 (11.1%); P > 0.05]. We also did not find evidence of an association between APOE alleles and proliferative DR (epsilon2, epsilon3 and epsilon4 in cases: 9, 76, and 15%, and in controls: 5, 88, and 12%, respectively) but the carriers of epsilon2 allele were more frequent among patients with type 2 DM and DR than in controls [cases: 15/95 (15.8%); controls: 7/107 (6.5%); P < 0.05]. Therefore, our results suggest that the epsilon2 allele/APOE might be a risk factor for diabetes in the Brazilian population.