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Background. Diabetic retinopathy (DR) has been primarily indicated to cause vision impairment and blindness, while no studies have focused on the cost-utility of telemedicine-based and community screening programs for DR in China, especially in rural and urban areas, respectively. Methods. We developed a Markov model to calculate the cost-utility of screening programs for DR in DM patients in rural and urban settings from the societal perspective. The incremental cost-utility ratio (ICUR) was calculated for the assessment. Results. In the rural setting, the community screening program obtained 1 QALY with a cost of $4179 (95% CI 3859 to 5343), and the telemedicine screening program had an ICUR of $2323 (95% CI 1023 to 3903) compared with no screening, both of which satisfied the criterion of a significantly cost-effective health intervention. Likewise, community screening programs in urban areas generated an ICUR of $3812 (95% CI 2906 to 4167) per QALY gained, with telemedicine screening at an ICUR of $2437 (95% CI 1242 to 3520) compared with no screening, and both were also cost-effective. By further comparison, compared to community screening programs, telemedicine screening yielded an ICUR of 1212 (95% CI 896 to 1590) per incremental QALY gained in rural setting and 1141 (95% CI 859 to 1403) in urban setting, which both meet the criterion for a significantly cost-effective health intervention. Conclusions. Both telemedicine and community screening for DR in rural and urban settings were cost-effective in China, and telemedicine screening programs were more cost-effective.