Diabetic retinopathy (DR) is the most common complication of diabetes and remains one of the major causes of blindness in the world; infants born to diabetic mothers have higher risk of developing retinopathy of prematurity (ROP). While hyperglycemia is a major risk factor, the molecular and cellular mechanisms underlying DR and diabetic ROP are poorly understood. To explore the consequences of retinal cells under high glucose, we cultured wild type or E2f1^−/− mouse retinal explants from postnatal day 8 with normal glucose, high osmotic or high glucose media. Explants were also incubated with cobalt chloride (CoCl₂) to mimic the hypoxic condition. We showed that, at 7 days post exposure to high glucose, retinal explants displayed elevated cell death, ectopic cell division and intact retinal vascular plexus. Cell death mainly occurred in excitatory neurons, such as ganglion and bipolar cells, which were also ectopically dividing. Many Müller glial cells reentered the cell cycle; some had irregular morphology or migrated to other layers. High glucose inhibited the hyperoxia-induced blood vessel regression of retinal explants. Moreover, inactivation of E2f1 rescued high glucose-induced ectopic division and cell death of retinal neurons, but not ectopic cell division of Müller glial cells and vascular phenotypes. This suggests that high glucose has direct but distinct effects on retinal neurons, glial cells and blood vessels, and that E2f1 mediates its effects on retinal neurons. These findings shed new light onto mechanisms of DR and the fetal retinal abnormalities associated with maternal diabetes, and suggest possible new therapeutic strategies.