Diabetic retinopathy (DR) is a neurovascular complication of diabetes. As a crucial player in the retinal physiology, Müller cells are affected in DR, impairments of Müller cell function lead to retinal malfunctions. Therefore, searching for approaches to mitigate diabetes-induced injury in Müller cells is imperative for delaying DR. Peroxiredoxin 4 (PRDX4), an important endoplasmic reticulum (ER)-resident antioxidant, was explored in this study for its potential protective role against DR. Streptozotocin-induced mouse model of diabetes and high glucose (HG)-induced Müller cells were utilized to assess the impact of PRDX4. Compared with WT mice, PRDX4 knockout exacerbated retinal neurodegeneration, reactive gliosis, cell apoptosis, ER stress, oxidative stress, and mitochondrial dysfunction in diabetic retinas. Knockdown of PRDX4 aggravated HG-induced reactive gliosis, apoptosis, ER stress, oxidative stress, and mitochondrial dysfunction in Müller cells. Conversely, PRDX4 overexpression in Müller cells protected against HG-induced cell damage. Mechanistically, PRDX4 promoted the degradation of dipeptidyl peptidase-4, which is associated with DR in type 1 diabetics, thereby alleviating HG-stimulated Müller cell abnormalities. Our study indicated that PRDX4 is a crucial protective regulator in DR progression via destabilization of dipeptidyl peptidase-4 protein and suggested that enhancement of PRDX4 level may represent a promising approach for treating DR.