Streptozotocin (STZ)-induced diabetes is associated with reductions in the electrical response of the outer retina and retinal pigment epithelium (RPE) to light. Aldose reductase (AR) is the first enzyme required in the polyol-mediated metabolism of glucose, and AR inhibitors have been shown to improve diabetes-induced electroretinogram (ERG) defects. Here, we used control and AR−/− mice to determine if genetic inactivation of this enzyme likewise inhibits retinal electrophysiological defects observed in a mouse model of type 1 diabetes. STZ was used to induce hyperglycemia and type 1 diabetes. Diabetic and age-matched nondiabetic controls of each genotype were maintained for 22 weeks, after which ERGs were used to measure the light-evoked components of the RPE (dc-ERG) and the neural retina (a-wave, b-wave). In comparison to their nondiabetic controls, wildtype (WT) and AR−/− diabetic mice displayed significant decreases in the c-wave, fast oscillation, and off response components of the dc-ERG but not in the light peak response. Nondiabetic AR−/− mice displayed larger ERG component amplitudes than did nondiabetic WT mice; however, the amplitude of dc-ERG components in diabetic AR−/− animals were similar to WT diabetics. ERG a-wave amplitudes were not reduced in either diabetic group, but b-wave amplitudes were lower in WT and AR−/−diabetic mice. These findings demonstrate that the light-induced responses of the RPE and outer retina are disrupted in diabetic mice, but these defects are not due to photoreceptor dysfunction, nor are they ameliorated by deletion of AR. This latter finding suggests that benefits observed in other studies utilizing pharmacological inhibitors of AR might have been secondary to off-target effects of the drugs.