Decreased collateral vessel formation in diabetic peripheral limbs is characterized by abnormalities of the angiogenic response to ischemia. Hyperglycemia is known to activate protein kinase C (PKC), affecting the expression and activity of growth factors such as vascular endothelial growth factor (VEGF) and platelet-derived growth factor (PDGF). The current study investigates the role of PKCδ in diabetes-induced poor collateral vessel formation and inhibition of angiogenic factors expression and actions. Ischemic adductor muscles of diabetic Prkcd(+/+) mice exhibited reduced blood reperfusion, vascular density, and number of small vessels compared with nondiabetic Prkcd(+/+) mice. By contrast, diabetic Prkcd(-/-) mice showed significant increased blood flow, capillary density, and number of capillaries. Although expression of various PKC isoforms was unchanged, activation of PKCδ was increased in diabetic Prkcd(+/+) mice. VEGF and PDGF mRNA and protein expression were decreased in the muscles of diabetic Prkcd(+/+) mice and were normalized in diabetic Prkcd(-/-) mice. Furthermore, phosphorylation of VEGF receptor 2 (VEGFR2) and PDGF receptor-β (PDGFR-β) were blunted in diabetic Prkcd(+/+) mice but elevated in diabetic Prkcd(-/-) mice. The inhibition of VEGFR2 and PDGFR-β activity was associated with increased SHP-1 expression. In conclusion, our data have uncovered the mechanisms by which PKCδ activation induced poor collateral vessel formation, offering potential novel targets to regulate angiogenesis therapeutically in diabetic patients.