Endothelial dysfunction is characterized by reduced bioavailability of NO due to its inactivation to form peroxynitrite or reduced expression of eNOS. Here, we examine the causal role of peroxynitrite in mediating diabetes-induced endothelial dysfunction. Diabetes was induced by STZ-injection, and rats received the peroxynitrite decomposition catalyst (FeTTPs, 15 mg/Kg/day) for 4 weeks. Vasorelaxation to acetylcholine, oxidative-stress markers, RhoA activity, and eNOS expression were determined. Diabetic coronary arteries showed significant reduction in ACh-mediated maximal relaxation compared to controls. Diabetic vessels showed also significant increases in lipid-peroxides, nitrotyrosine, and active RhoA and 50% reduction in eNOS mRNA expression. Treatment of diabetic animals with FeTTPS blocked these effects. Studies in aortic endothelial cells show that high glucose or peroxynitrite increases the active RhoA kinase levels and decreases eNOS expression and NO levels, which were reversed with blocking peroxynitrite or Rho kinase. Together, peroxynitrite can suppress eNOS expression via activation of RhoA and hence cause vascular dysfunction.