Several molecular mechanisms have been identified that mediate the tissue-damaging effects of hyperglycemia. These are increased flux through the polyol and hexosamine pathways, increased formation of advanced glycation end products, activation of protein kinase C, and augmented generation of reactive oxygen species (ROS). Increased production of ROS not only causes cellular damage but also activates the signal transduction cascade that activates specific target genes. Based on recent experimental data, it is now accepted that increased NADPH oxidase activity in tissues vulnerable to hyperglycemia takes place downstream of the advanced glycation end products and protein kinase C pathways, two of the primary mechanisms involved in the pathogenesis of diabetic complications. Thus, compounds that suppress NADPH oxidase activity may offer therapeutic benefits to ameliorate diabetic complications, highlighting the significance of NADPH oxidase as a new therapeutic target.