The red-eye effect is caused when a camera flash enters a subject's eye and reflects off of the retina before his pupils have time to constrict and limit the amount of light entering. The red color is caused by the amount of blood found in the choroid, a bunch of blood vessels between the retina and sclera, located in the back of the eye.
Whenever possible, the best method to reduce red-eye is by not using a flash at all. Practicing good lighting techniques makes using a flash unnecessary and eliminates the possibility of the red-eye effect occurring. Many cameras are equipped with an anti-red-eye feature that cancels out the effect regardless of lighting conditions.
One way to prevent the red-eye effect from occurring in photography is to have the subject avoid looking directly at the camera. This technique prevents the light from entering directly into the retina and reflecting back into the camera lens. Another technique for reducing red-eye is to brighten the room or area in which the subject is being photographed. This causes the subject's pupils to constrict and allow less light into the eyes. Yet another method to reduce red-eye is to move the camera flash further away from the lens since the light reflects back towards the flash, not the camera lens.