Diabetes-induced endothelial dysfunction is critical for the development of diabetic cardiovascular complications. The aim of this study was to investigate the effect of niclosamide (Nic) on vascular endothelial dysfunction in streptozotocin (STZ)-induced diabetic rats. Male Sprague-Dawley rats were injected with a single intraperitoneal injection of STZ (75 mg/kg) to induce type 1 diabetes, and Nic (10 mg/kg) was intraperitoneally administered per day for 4 weeks. Endothelial function was evaluated as carbachol (CCh, an endothelium-dependent vasodilator)-evoked relaxation in the experiments performed on isolated thoracic aortas. The changes in the protein expressions of phosphorylated eNOS at serine 1177 (p-eNOS) and phosphorylated VASP at serine 239 (p-VASP) of the rat aortas were analyzed by western blotting to determine whether NO/cGMP signaling is involved in the mechanism of Nic. STZ-injected rats had higher fasting blood glucose and less body weight compared to control rats (p < 0.05). Nic treatment did not affect blood glucose levels or body weights of the rats. CCh-induced endothelium-dependent relaxation of the aortic rings was significantly decreased in diabetic rats compared to control (E = 66.79 ± 7.41% and 90.28 ± 5.55%, respectively; p < 0.05). CCh-induced relaxation response was greater in Nic-treated diabetic rats compared to diabetic rats (E = 91.56 ± 1.20% and 66.79 ± 7.41%, respectively; p < 0.05). Phosphorylation of eNOS and VASP in aortic tissues was significantly reduced in diabetic rats, which were markedly increased by Nic treatment (p < 0.05). We demonstrated that Nic improved endothelial dysfunction possibly through the activation of NO/cGMP signaling without affecting hyperglycemia in diabetic rats. Our results suggesting that Nic has potential of repurposing for diabetic cardiovascular complications.