1. The aim of this study was to examine the mechanism of impaired platelet-mediated endothelium-dependent vasodilation in diabetes. Exposure of human platelets to high glucose in vivo or in vitro impairs their ability to cause endothelium-dependent vasodilation. While previous data suggest that the mechanism for this involves increased activity of the cyclo-oxygenase pathway, the signal transduction pathway mediating this effect is unknown. 2. Platelets from diabetic patients as well as normal platelets and normal platelets exposed to high glucose concentrations were used to determine the role of the polyol pathway, diacylglycerol (DAG) production, protein kinase C (PKC) activity and phospholipase A2 (PLA2) activity on vasodilation in rabbit carotid arteries. 3. We found that two aldose-reductase inhibitors, tolrestat and sorbinil, caused only a modest improvement in the impairment of vasodilation by glucose exposed platelets. However, sorbitol and fructose could not be detected in the platelets, at either normal or hyperglycaemic conditions. We found that incubation in 17 mM glucose caused a significant increase in DAG levels in platelets. Furthermore, the DAG analog 1-oleoyl-2-acetyl-sn-glycerol (OAG) caused significant impairment of platelet-mediated vasodilation. The PKC inhibitors calphostin C and H7 as well as inhibitors of PLA2 activity normalized the ability of platelets from diabetic patients to cause vasodilation and prevented glucose-induced impairment of platelet-mediated vasodilation in vitro. 4. These results suggest that the impairment of platelet-mediated vasodilation caused by high glucose concentrations is mediated by increased DAG levels and stimulation of PKC and PLA2 activity.