Diabetic retinopathy (DR) is a common microvascular complication of diabetes mellitus. Abnormal energy metabolism in microvascular endothelium is involved in the progression of diabetic retinopathy. Bile Acid G‐Protein‐Coupled Membrane Receptor (TGR5) has emerged as a novel regulator of metabolic disorders. However, the role of TGR5 in diabetes mellitus‐induced microvascular dysfunction in retinas is largely unknown. Herein, enzyme‐linked immunosorbent assay was used for analyzing bile acid (BA) profiles in diabetic rat retinas and retinal microvascular endothelial cells (RMECs) cultured in high glucose medium. The effects of TGR5 agonist on streptozotocin (STZ)‐induced diabetic retinopathy were evaluated by HE staining, TUNEL staining, retinal trypsin digestion, and vascular permeability assay. A pharmacological inhibitor of RhoA was used to study the role of TGR5 on the regulation of Rho/Rho‐associated coiled‐coil containing protein kinase (ROCK) and western blot, immunofluorescence and siRNA silencing were performed to study the related signaling pathways. Here we show that bile acids were downregulated during DR progression in the diabetic rat retinas and RMECs cultured in high glucose medium. The TGR5 agonist obviously ameliorated diabetes‐induced retinal microvascular dysfunction in vivo, and inhibited the effect of TNF‐α on endothelial cell proliferation, migration, and permeability in vitro. In contrast, knockdown of TGR5 by siRNA aggravated TNF‐α‐induced actin polymerization and endothelial permeability. Mechanistically, the effects of TGR5 on the improvement of endothelial function was due to its regulatory role on the ROCK signaling pathway. An inhibitor of RhoA significantly reversed the loss of tight junction protein under TNF‐α stimulation. Taken together, our findings suggest that insufficient BA signaling plays an important pathogenic role in the development of DR. Upregulation or activation of TGR5 may inhibit RhoA/ROCK‐dependent actin remodeling and represent an important therapeutic intervention for DR.