Diabetic retinopathy (DR) is a significant cause of blindness in working-age adults worldwide. Lack of effective strategies to prevent or reduce vision loss is a major problem. Since the degeneration of retinal neurons is an early event in the diabetic retina, studies to characterize the molecular mechanisms of diabetes-induced retinal neuronal damage and dysfunction are of high significance. We have demonstrated that spermine oxidase (SMOX), a mediator of polyamine oxidation is critically involved in causing neurovascular damage in the retina. The involvement of SMOX in diabetes-induced retinal neuronal damage is completely unknown. Utilizing the streptozotocin-induced mouse model of diabetes, the impact of the SMOX inhibitor, MDL 72527, on neuronal damage and dysfunction in the diabetic retina was investigated. Retinal function was assessed by electroretinography (ERG) and retinal architecture was evaluated using spectral domain-optical coherence tomography. Retinal cryosections were prepared for immunolabeling of inner retinal neurons and retinal lysates were used for Western blotting. We observed a marked decrease in retinal function in diabetic mice compared to the non-diabetic controls. Treatment with MDL 72527 significantly improved the ERG responses in diabetic retinas. Diabetes-induced retinal thinning was also inhibited by the MDL 72527 treatment. Our analysis further showed that diabetes-induced retinal ganglion cell damage and neurodegeneration were markedly attenuated by MDL 72527 treatment. These results strongly implicate SMOX in diabetes-induced retinal neurodegeneration and visual dysfunction.