We present the methodology for 45 degrees retinal photography and detail the development, application and validation of a new system of 45 degrees field grading standards for the assessment of diabetic retinopathy. The systems were developed for the EURO-DIAB IDDM Complications Study, part of a European Community funded Concerted Action Programme into the epidemiology and prevention of diabetes (EURODIAB). Assessment of diabetic retinopathy was carried out centrally by a trained reader of colour retinal photographs using the newly-developed system. The system proved to be acceptably accurate, repeatable and relatively simple to apply. It compared well with the recognised 'gold standard' 7-field 30 degrees stereo photography (assessed using a modified Airlie House classification scheme), against which the new system was validated in a series of 48 eyes. Selection was as a stratified random sample based on clinical retinopathy status: 5, no retinopathy; 25, non-proliferative retinopathy; 16, proliferative or photocoagulated; plus 2, eyes with potentially confounding lesions (vein occlusion). Simple presence of retinal lesions was correctly detected by both systems in 43 of the 48 eyes, giving 100 % agreement on detection. Both systems correctly identified the two known cases of confounding vein occlusion. In eyes with diabetic retinopathy (n = 41), when severity was expressed in three groups: mild background, moderate/severe background and proliferative/ photocoagulated, at least one grader (out of five) using the new system matched the verified results in 38 out of 41 (93 %) eyes and three or more graders matched in 31 (76 %) eyes. Individually the five graders' 2-field allocations agreed well with the verified levels (median number of agreements 37, range 28-43). Repeatability was assessed by measures of within and between observer variation using randomly selected samples of 10 % (n = 252 eyes) and 5 % (n = 123 eyes) of the main study, respectively, expressed as a resultant kappa value for chance-corrected proportional agreement. Within observer assessment yielded a kappa of 0.85 and between observers a value of 0.83 indicating very good agreement for both measures. The method is particularly useful for large epidemiological studies, in which participating centres have a limited experience in retinal photography.