Aims/hypothesis In previous studies we have shown that extravasated, modified LDL is associated with pericyte loss, an early feature of diabetic retinopathy (DR). Here we sought to determine detailed mechanisms of this LDL-induced pericyte loss. Methods Human retinal capillary pericytes (HRCP) were exposed to ‘highly-oxidised glycated’ LDL (HOG-LDL) (a model of extravasated and modified LDL) and to 4-hydroxynonenal or 7-ketocholesterol (components of oxidised LDL), or to native LDL for 1 to 24 h with or without 1 h of pretreatment with inhibitors of the following: (1) the scavenger receptor (polyinosinic acid); (2) oxidative stress (N-acetyl cysteine); (3) endoplasmic reticulum (ER) stress (4-phenyl butyric acid); and (4) mitochondrial dysfunction (cyclosporin A). Oxidative stress, ER stress, mitochondrial dysfunction, apoptosis and autophagy were assessed using techniques including western blotting, immunofluorescence, RT-PCR, flow cytometry and TUNEL assay. To assess the relevance of the results in vivo, immunohistochemistry was used to detect the ER stress chaperon, 78 kDa glucose-regulated protein, and the ER sensor, activating transcription factor 6, in retinas from a mouse model of DR that mimics exposure of the retina to elevated glucose and elevated LDL levels, and in retinas from human participants with and without diabetes and DR. Results Compared with native LDL, HOG-LDL activated oxidative and ER stress in HRCP, resulting in mitochondrial dysfunction, apoptosis and autophagy. In a mouse model of diabetes and hyperlipidaemia (vs mouse models of either condition alone), retinal ER stress was enhanced. ER stress was also enhanced in diabetic human retina and correlated with the severity of DR. Conclusions/interpretation Cell culture, animal, and human data suggest that oxidative stress and ER stress are induced by modified LDL, and are implicated in pericyte loss in DR.