Oxidative stress mediated by hyperglycaemia-induced generation of reactive oxygen species (ROS) contributes significantly to the development and progression of diabetes and related vascular complications. NAD(P)H oxidase has been implicated as the major source of ROS generation in the vasculature in response to high glucose and advanced glycation end-products. Sustained activation of NAD(P)H oxidase in diabetes may diminish intracellular levels of NADPH, an essential cofactor for endothelial NO synthase (eNOS) and several antioxidant systems. Recent evidence suggests that basal ROS production via NAD(P)H oxidase may upregulate antioxidant enzyme defenses via redox signalling. Thus, NAD(P)H oxidase may serve as a double-edged sword, with transient activation providing a feedback defense against excessive ROS generation through the activation of receptor tyrosine kinases and the redox-sensitive Nrf2-Keap1 signalling pathway. Overproduction of ROS leads to eNOS uncoupling, mitochondrial dysfunction, and impaired antioxidant defenses owing to depletion of intracellular NADPH. Given the largely negative outcome of antioxidant therapy in the treatment of diabetic complications, targeting the redox-sensitive transcription factor Nfr2 may provide an effective strategy to restore antioxidant defenses in diabetes.