The major cause of blindness in the world is diabetic-related eye disease. Various parts of the body get affected due to complication of diabetes. Diabetic retinopathy is termed as high level of glucose in the retina, which may cause blurring of the vision and can lead to blindness. To avoid further damage of vision, time to time testing of retina is done to detect the early stages of diabetic retinopathy. This project aims for detection of Diabetic retinopathy (DR) by taking cup to disc ratio into consideration. Morphological processing techniques are used on the fundus images to extract features of optic disc such as area of disc and area of cup, we calculate the area of each extracted feature. Depending on the area of cup to disc ratio we identify the severity of the disease. Depending on the severity of disease, treatment measures can be analysed. To make it more user friendly GUI in MATLAB is used and to track the progress of disease, database is maintained. By making use of this project, ophthalmologists will surely be able to track the severity of disease and make it more efficient to keep Diabetic retinopathy (DR) under control.