Diabetic patients have shorter life span and poorer Quality of Life mainly due to diabetic vascular complications. Recent in vitro and in vivo studies have shown that advanced glycation endproducts (AGE) account for diabetic vascular complications through their engagement of the receptor for AGE (RAGE). In this review, we summarize our recent studies on the roles of the AGE-RAGE system in diabetes-induced vascular injury. In vitro experiments showed that AGE engagement of RAGE leads to changes in endothelial cells (EC) and pericytes, which are characteristic of diabetic microangiopathy. Diabetic RAGE transgenic mice that overexpress RAGE in vascular cells exhibited the exacerbation of the indices of nephropathy and retinopathy, and this was prevented by the inhibition of AGE formation. RAGE overexpression also caused calcium handling impairment in cardiac myocytes. In contrast to the RAGE-overexpressing mice, diabetic RAGE knockout mice showed marked improvement of nephropathy. We found that human vascular cells express a novel splice variant coding for a soluble RAGE protein and named it endogenous secretory RAGE (esRAGE). The esRAGE neutralizes AGE actions on EC and is present in human sera. Individual variations in circulating esRAGE could be a determinant for individual differences in susceptibility or resistance to the development of diabetic vascular complications. The AGE-RAGE system should be, therefore, a candidate molecular target for overcoming diabetic vascular complications.