The 66-kDa Src homology 2 domain-containing protein (p66Shc) is a master regulator of reactive oxygen species (ROS). It is expressed in many tissues where it contributes to organ dysfunction by promoting oxidative stress. In the vasculature, p66Shc-induced ROS engenders endothelial dysfunction. Here we show that p66Shc is a direct target of the Sirtuin1 lysine deacetylase (Sirt1), and Sirt1-regulated acetylation of p66Shc governs its capacity to induce ROS. Using diabetes as an oxidative stimulus, we demonstrate that p66Shc is acetylated under high glucose conditions and is deacetylated by Sirt1 on lysine 81. High glucose-stimulated lysine acetylation of p66Shc facilitates its phosphorylation on serine 36 and translocation to the mitochondria, where it promotes hydrogen peroxide production. Endothelium-specific transgenic and global knockin mice expressing p66Shc that is not acetylatable on lysine 81 are protected from diabetic oxidative stress and vascular endothelial dysfunction. These findings show that p66Shc is a target of Sirt1, uncover a unique Sirt1-regulated lysine acetylation-dependent mechanism that governs the oxidative function of p66Shc, and demonstrate the importance of p66Shc lysine acetylation in vascular oxidative stress and diabetic vascular pathophysiology.