Hyperglycemia is the major causal factor in the development of diabetic vascular complications. The mechanism by which hyperglycemia causes the complications is not clear; however, it is very likely that hyperglycemia is mediating its adverse effects through multiple mechanisms. We have summarized some of these mechanisms in this review, with particular attention to the effect of hyperglycemia on the activation of diacylglycerol (DAG)-protein kinase C (PKC) pathway. We have reviewed existing information regarding various vascular tissues that show increased DAG and PKC levels. In addition, the mechanism by which hyperglycemia increases DAG as well as the cellular physiological consequences on the activation of PKC have been reviewed.