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Retinal image analysis is very effective in early detection and diagnosis of diabetic retinopathy. Diabetic retinopathy is a progressive disease and is broadly classify into two stages i.e. Non proliferative diabetic retinopathy (NPDR) and Proliferative diabetic retinopathy (PDR). A sign of PDR is the appearance of new blood vessels in fundus area and inside optic disc known as neovascularization. The study of blood vessel is very important for detection of neovascularization. In this paper, we present a method for accurate blood vessel detection which can be used for detection of neovascularization. The paper presents a new method for vessel segmentation using a multilayered thresholding technique. The method is tested using two publicly available retinal image databases and experimental results show the significance of proposed work.