The blood-retinal barrier (BRB) is a biological unit comprised of specialized capillary endothelial cells firmly connected by intercellular tight junctions and endothelium-surrounding glial cells. The BRB is essential for maintaining the retinal microenvironment and low permeability and is compromised in an early phase during the progression of diabetic retinopathy. Here, we demonstrate that retinoic acid receptor (RAR)alpha stimulants preferentially act on glial cells rather than endothelial cells, resulting in the enhanced expression of glial cell line-derived neurotrophic factor (GDNF) through recruitment of the RARalpha-driven trans-acting coactivator to the 5'-flanking region of the gene promoter. Conversely, RARalpha decreases expression of vascular endothelial growth factor (VEGF)/vascular permeability factor. These gene expression alterations causally limit vascular permeability by modulating the tight junction function of capillary endothelium in a paracrine manner in vitro. The phenotypic transformation of glial cells mediated by RARalpha is sufficient for significant reductions of vascular leakage in the diabetic retina, suggesting that RARalpha antagonizes the loss of tight junction integrity induced by diabetes. These findings reveal that glial cell-derived cytokines such as GDNF and VEGF regulate BRB function, implying that the glial cell can be a possible therapeutic target in diabetic retinopathy.