Diabetic retinopathy (DR) is a sight threatening complication due to diabetes mellitus that affects the retina. Research shows that the foveal avascular zone (FAZ) could be used to diagnose DR as it enlarges in DR cases due to the loss of capillaries in the perifoveal capillary network. A computerised DR monitoring and grading system based on analysis of FAZ enlargement in colour fundus image has been developed and has high values of sensitivity, specificity and accuracy. However the system is still semi automated. A user interruption is needed in the selection of retinal vessel endpoints to determine the FAZ. Therefore, the objective of this paper is to improve the FAZ determination so that the computerised DR grading system is fully automated. Results show the fully automated system consistently maintains high sensitivity (>73), specificity (>77) and accuracy (>77) for all DR stages. This indicates that the fully automated DR monitoring and grading system has a potential to be used for early detection of DR and for effective treatment of severe cases. © 2011 Springer-Verlag Berlin Heidelberg.