Diabetic macular edema (DME) is a frequent complication of diabetic retinopathy and may cause severe visual loss. In this article, we examine the pathophysiology of DME and review various treatment options, such as laser photocoagulation, anti-vascular endothelial growth factor (VEGF) receptor antibodies, and steroids including ILUVIEN(®), which is a new sustained-release, non biodegradable, injectable, intravitreal micro-implant containing fluocinolone acetonide. The results of the FAME (Fluocinolone Acetonide in Diabetic Macular Edema) studies, conducted to evaluate the efficacy and safety of ILUVIEN(®) in DME, are discussed.