Fibrosis is an accumulation of extracellular matrix (ECM) proteins and fibers in a disordered fashion, which compromises cell and tissue functions. High glucose-induced fibrosis, a major pathophysiological change of diabetic retinopathy (DR), severely affects vision by compromising the retinal vasculature and ultimately disrupting retinal tissue organization. The retina is a highly vascularized, stratified tissue with multiple cell types organized into distinct layers. Chronically high blood glucose stimulates certain retinal cells to increase production and assembly of ECM proteins resulting in excess ECM deposition primarily in the capillary walls on the basal side of the endothelium. This subendothelial fibrosis of the capillaries is the earliest histological change in the diabetic retina and has been linked to the vascular dysfunction that underlies DR. Proteins that are not normally abundant in the capillary basement membrane (BM) matrix, such as the ECM protein fibronectin, are assembled in significant quantities, disrupting the architecture of the BM and altering its properties. Cell culture models have identified multiple mechanisms through which elevated glucose can stimulate fibronectin matrix assembly, including intracellular signaling pathways, alternative splicing, and non-enzymatic glycation of the ECM. The fibrotic subendothelial matrix alters cell adhesion and supports further accumulation of other ECM proteins leading to disruption of endothelial cell-cell junctions. We review evidence supporting the notion that these molecular changes in the ECM contribute to the pathogenesis of DR, including vascular leakage, loss of endothelial cells and pericytes, changes in blood flow, and neovascularization. We propose that the accumulation of ECM, especially fibronectin matrix, first around the vasculature and later in extravascular locations, plays a critical role in DR and vision loss. Strategies for DR prevention and treatment should consider the ECM a potential therapeutic target.