Background: Diabetic macular edema (DME) is a leading cause of vision loss in diabetic retinopathy (DR) patients. Spectral domain optical coherence tomography (SD-OCT) enables precise morphological classification, critical for diagnosis and treatment planning. Objective: To establish a comprehensive SD-OCT-based classification system for DME and evaluate its clinical correlations with visual acuity, central foveal thickness, and risk factors. Methods: A prospective observational case-series (90 eyes/48 patients with DR, Dec 2013–Nov 2015, Gandhi Medical College, Bhopal) included complete ophthalmic workup and SD-OCT imaging, analyzing DME patterns, visual acuity, central foveal thickness, diabetes duration, HbA1c. Classification followed established morphologic criteria and correlated with clinical variables. Results: SD-OCT detected DME in 91.11% of eyes, compared to 77.7% by slit-lamp biomicroscopy (p=0.0224). Cystoid macular edema was most common (33.75%), followed by serous detachment (26.25%), vitreomacular traction (21.25%), spongy pattern (13.75%), and epiretinal membrane traction (5%). Significant correlation was found between central foveal thickness and visual acuity (r=0.46, p=0.002531). Serous detachment predicted the worst visual acuity (mean log MAR 0.84) and highest mean foveal thickness (618.61 μm). Longer diabetes duration (≥10 years) and deranged HbA1c significantly increased DME risk.[1][2][3][4] Conclusion: SD-OCT offers superior sensitivity for early DME detection. The six-type OCT-based classification correlates well with anatomical findings and functional vision, guiding management and prognosis.