Subclinical hypothyroidism (SCH) is defined as an asymptomatic state characterized by normal serum levels of free thyroxine and elevated serum concentrations of thyrotropin (> 4.0 μU/ml). The association between SCH and type 2 diabetes has been well established. Proliferative diabetic retinopathy (PDR) that is characterized by neovascularization is a leading cause of visual loss in adults worldwide. However, whether SCH is related to PDR has not been studied. This study thus aimed to evaluate the relationship between SCH and PDR in type 2 diabetes. A total of 371 type 2 diabetic subjects were enrolled: 187 subjects with PDR and 184 subjects without diabetic retinopathy (with HbA1c above 6.5% and at least 10 years of diabetes duration). Subjects with PDR had higher blood pressure, higher serum levels of total cholesterol, low-density lipoprotein cholesterol and thyrotropin, and higher urinary albumin excretion rate. Of the 371 diabetics, 83 subjects (22.4%) were diagnosed as SCH (male 12.1% and female 29.9%). The prevalence of SCH in the PDR group (51/187, 27.3%) was higher than that in the subjects without diabetic retinopathy (32/184, 17.4%). Logistic regression analysis showed that after adjusting for compounding variables, SCH was independently related with PDR (p = 0.032, adjusted OR = 2.485). These results indicate that type 2 diabetic patients with PDR are at an increased risk of SCH. A routine screening for thyroid function may thus be considered advisable in PDR subjects. This may be helpful in investigating new strategies preventing or treating PDR in clinical practice.