Vascular smooth muscle cell (VSMC) proliferation and migration and vascular endothelial cell (VEC) dysfunction are closely associated with the development of atherosclerosis. We previously demonstrated that protein tyrosine phosphatase ε M (PTPεM) promotes VEC survival and migration. The present study investigates the biological functions of PTPεM in VSMCs and determines whether PTPεM is implicated in diabetes-accelerated atherosclerosis. We overexpressed wild-type and inactive PTPεM and an small interfering RNA (siRNA) of PTPεM by using an adenovirus vector to investigate the effects of PTPεM upon platelet-derived growth factor (PDGF)- and high glucose (HG)-induced responses of rat VSMCs in vitro. We found that PTPεM decreased PDGF-induced DNA synthesis and migration by reducing the phosphorylation level of the PDGF β-receptor (PDGFRβ) with subsequently suppressed H(2)O(2) generation. The HG content in the medium generated H(2)O(2), upregulated PDGFRβ expression and its tyrosine-phosphorylation, and elevated NADPH oxidase 1 (Nox1) expression even without exogenous PDGF, all of which were downregulated by PTPεM. The PDGFR inhibitor AG1296 also blocked HG-induced Nox1 expression and H(2)O(2) production. Moreover, HG suppressed PTPεM expression itself, which was blocked by the antioxidant N-acetyl-l-cysteine. The effects of PTPεM siRNA were the opposite of those of wild-type PTPεM. Therefore, PTPεM negatively regulates PDGFRβ-mediated signaling pathways that are crucial for the pathogenesis of atherosclerosis, and PTPεM may be involved in diabetes-accelerated atherosclerosis.