Müller cells and macrophages/microglia are likely important for the development of diabetic retinopathy; however, the interplay between these cells in this disease is not well understood. An inflammatory process is linked to the onset of experimental diabetic retinopathy. CD40 deficiency impairs this process and prevents diabetic retinopathy. Using mice with CD40 expression restricted to Müller cells, we identified a mechanism by which Müller cells trigger proinflammatory cytokine expression in myeloid cells. During diabetes, mice with CD40 expressed in Müller cells upregulated retinal tumor necrosis factor-α (TNF-α), interleukin 1β (IL-1β), intracellular adhesion molecule 1 (ICAM-1), and nitric oxide synthase (NOS2), developed leukostasis and capillary degeneration. However, CD40 did not cause TNF-α or IL-1β secretion in Müller cells. TNF-α was not detected in Müller cells from diabetic mice with CD40 + Müller cells. Rather, TNF-α was upregulated in macrophages/microglia. CD40 ligation in Müller cells triggered phospholipase C–dependent ATP release that caused P2X 7-dependent production of TNF-α and IL-1β by macrophages. P2X 7 −/− mice and mice treated with a P2X 7 inhibitor were protected from diabetes-induced TNF-α, IL-1β, ICAM-1, and NOS2 upregulation. Our studies indicate that CD40 in Müller cells is sufficient to upregulate retinal inflammatory markers and appears to promote experimental diabetic retinopathy and that Müller cells orchestrate inflammatory responses in myeloid cells through a CD40-ATP-P2X 7 pathway.