Diabetes-associated vascular complications are collectively the major clinical problems facing patients with diabetes and lead to the considerably higher mortality rate than that of the general population. People with diabetes have a much higher incidence of coronary artery disease as well as peripheral vascular diseases in part because of accelerated atherogenesis. Despite the introduction of new therapies, it has not been possible to effectively reduce the high cardiovascular morbidity and mortality associated with diabetes. Of additional concern is the recognition by the World Health Organization that we are facing a global epidemic of type 2 diabetes. Endothelial dysfunction is an early indicator of cardiovascular disease, including that seen in type 2 diabetes. A healthy endothelium, as defined in terms of the vasodilator/blood flow response to an endothelium-dependent vasodilator, is an important indicator of cardiovascular health and, therefore, a goal for corrective interventions. In this review we explore the cellular basis for endothelial dysfunction in an attempt to identify appropriate new targets and strategies for the treatment of diabetes. In addition, we consider the question of biomarkers for vascular disease and evaluate their usefulness for the early detection of and their role as contributors to vascular dysfunction.