Robert Furchgott's discovery of the obligatory role that the endothelium plays in the regulation of vascular tone has proved to be a major advance in terms of our understanding of the cellular basis of diabetic vascular disease. Endothelial dysfunction, as defined by a reduction in the vasodilatation response to an endothelium-dependent vasodilator (such as acetylcholine) or to flow-mediated vasodilatation, is an early indicator for the development of the micro- and macroangipathy that is associated with diabetes. In diabetes, hyperglycaemia plays a key role in the initiation and development of endothelial dysfunction; however, the cellular mechanisms involved as well as the importance of dyslipidaemia and co-morbidities such as hypertension and obesity remain incompletely understood. In this review, we discuss the mechanisms whereby hyperglycaemia, oxidative stress and dyslipidaemia can alter endothelial function and highlight their effects on endothelial nitric oxide synthase (eNOS), the endothelium-dependent hyperpolarising factor (EDHF) pathway(s), as well as on the role of endothelium-derived contracting factors (EDCFs) and adipocyte-derived vasoactive factors such as adipose-derived relaxing factor (ADRF).