We hypothesized that diabetes-induced oxidative stress may affect postischemic neovascularization. The response to unilateral femoral artery ligation was studied in wild-type or gp91(phox)-deficient control or type 1 diabetic mice or in animals treated with the anti-oxidant N-acetyl-l-cysteine (NAC) or with in vivo electrotransfer of a plasmid encoding dominant-negative Rac1 (50 microg) for 21 days. Postischemic neovascularization was reduced in diabetic mice in association with down-regulated vascular endothelial growth factor-A protein levels. In diabetic animals vascular endothelial growth factor levels and postischemic neovascularization were restored to nondiabetic levels by the scavenging of reactive oxygen species (ROS) by NAC administration or the inhibition of ROS generation by gp91(phox) deficiency or by administration of dominant-negative Rac1. Finally, diabetes reduced the ability of adherent bone marrow-derived mononuclear cells (BM-MNCs) to differentiate into endothelial progenitor cells. Treatment with NAC (3 mmol/L), apocynin (200 micromol/L), or the p38MAPK inhibitor LY333351 (10 micromol/L) up-regulated the number of endothelial progenitor cell colonies derived from diabetic BM-MNCs by 1.5-, 1.6-, and 1.5-fold, respectively (P < 0.05). In the ischemic hindlimb model, injection of diabetic BM-MNCs isolated from NAC-treated or gp91(phox)-deficient diabetic mice increased neovascularization by approximately 1.5-fold greater than untreated diabetic BM-MNCs (P < 0.05). Thus, inhibition of NADPH oxidase-derived ROS overproduction improves the angiogenic and vasculogenic processes and restores postischemic neovascularization in type 1 diabetic mice.