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Central to the development of diabetic macro- and microvascular disease is endothelial dysfunction, which appears well before any clinical sign, but importantly, is potentially reversible. We previously demonstrated that hyperglycemia activates NFAT in conduit and medium sized resistance arteries and that NFAT blockade abolishes diabetes-driven aggravation of atherosclerosis. Here we test whether NFAT plays a role in the development of endothelial dysfunction in diabetes.NFAT-dependent transcriptional activity was elevated in skin microvessels of diabetic Akita (Ins2 +/- ) mice when compared to non-diabetic littermates. Treatment of diabetic mice with the NFAT blocker A-285222 reduced NFATc3 nuclear accumulation and NFAT-luciferase transcriptional activity in skin microvessels, resulting in improved microvascular function, as assessed by laser Doppler imaging and iontophoresis of acetylcholine and localized heating. This improvement was abolished by pre-treatment with the nitric oxide synthase inhibitor L-NAME, while iontophoresis of the NO donor sodium nitroprusside eliminated the observed differences. A-285222 treatment enhanced dermis eNOS expression and plasma NO levels of diabetic mice. It also prevented induction of inflammatory cytokines IL-6 and osteopontin, lowered plasma Et-1 and blood pressure, and improved mice survival without affecting blood glucose. In vivo inhibition of NFAT may represent a novel therapeutic modality to preserve endothelial function in diabetes.