Many eye diseases that lead to vision loss, partial or complete blindness manifest themselves in the retina. While functional impairment of retinal cells could occur before any detectable structural change, today's standards for eye care mostly recommend functional tests only as a secondary tool for retinal disease diagnosis. This is partly due to insufficient knowledge of complete signal morphology and its relevance to retinal pathologies, the unavailability of gold-standard databases, and the limited application of advanced signal processing techniques in clinical practice. This review is devoted to highlighting advances in visual electrophysiological tests and their clinical significance. Following a brief overview of the existing state-of-the-art for retinal disease diagnosis, the electroretinogram (ERG) and its variants have been reviewed in detail. Special attention has been given to identifying the retinal origin of each component of individual ERG variants and their clinical relevance to diagnosing specific retinal diseases. A section summarizes data acquisition aspects and trends in feature extraction and pattern classification of ERG signals. Finally, the review outlines the existing challenges that must be addressed to enhance ERG's usefulness and its potential to become a gold standard for diagnosing, prognosing, and evaluating the treatment effectiveness of retinal diseases.