The polyol pathway consists of two enzymes, aldose reductase (AR) and sorbitol dehydrogenase (SDH). There is a growing body of evidence to suggest that acceleration of the polyol pathway is implicated in the pathogenesis of diabetic vascular complications. However, a functional role remains to be elucidated for SDH in the development and progression of diabetic retinopathy. In this study, cultured bovine retinal capillary pericytes were used to investigate the effects of SDH overexpression on glucose toxicity. High glucose modestly increased reactive oxygen species (ROS) generation, decreased DNA synthesis, and up-regulated vascular endothelial growth factor (VEGF) mRNA levels in cultured pericytes. SDH overexpression was found to significantly stimulate ROS generation in high glucose-exposed pericytes and subsequently potentiate the cytopathic effects of glucose. Fidarestat, a newly developed AR inhibitor, and N-acetylcysteine, an antioxidant, completely prevented these deleterious effects of SDH overexpression on pericytes. Furthermore, fidarestat administration was found to significantly prevent vascular hyperpermeability, the characteristic changes of the early phase of diabetic retinopathy, in streptozotocin-induced diabetic rats. Our present results suggest that SDH-mediated conversion of sorbitol to fructose and the resultant ROS generation may play an active role in the pathogenesis of diabetic retinopathy. Blockage of sorbitol formation by fidarestat could be a promising therapeutic strategy for the treatment of early phase of diabetic retinopathy.