Mitochondria are dynamic in structure, and undergo continuous fusion-fission to maintain their homeostasis. In diabetes, retinal mitochondria are swollen, their membrane is damaged and mitochondrial fusion protein, mitofusin 2 (Mfn2), is decreased. DNA methylation machinery is also activated and methylation status of genes implicated in mitochondrial damage and biogenesis is altered. This study aims to investigate the role of mitochondrial fusion in the development of diabetic retinopathy, and to illustrate the molecular mechanism responsible for Mfn2 suppression. Using human retinal endothelial cells, manipulated for Mfn2, we investigated the role of fusion in mitochondrial structural and functional damage in diabetes. The molecular mechanism of its suppression in diabetic milieu was determined by investigating Mfn2 promoter DNA methylation, and confirmed using molecular and pharmacological inhibitors of DNA methylation. Similar studies were performed in the retinal microvasculature (prepared by hypotonic shock method) of diabetic rats, and human donors with documented diabetic retinopathy. Overexpression of Mfn2 prevented glucose-induced increase in mitochondrial fragmentation, decrease in complex III activity and increase in membrane permeability, mtDNA damage and apoptosis. High glucose hypermethylated Mfn2 promoter and decreased transcription factor (SP1) binding, and Dnmt inhibition protected Mfn2 promoter from these changes. In streptozotocin-induced diabetic rats, intravitreal administration of Dnmt1-siRNA attenuated Mfn2 promoter hypermethylation and restored its expression. Human donors with diabetic retinopathy confirmed Mfn2 promoter DNA hypermethylation. Thus, regulating Mfn2 and its epigenetic modifications by molecular/pharmacological means will protect mitochondrial homeostasis in diabetes, and could attenuate the development of retinopathy in diabetic patients.