AIMS/HYPOTHESIS: In diabetes, advanced glycation end-products (AGEs) and the AGE precursor methylglyoxal (MGO) are associated with endothelial dysfunction and the development of microvascular complications. In this study we used a rat model of diabetes, in which rats transgenically overexpressed the MGO-detoxifying enzyme glyoxalase-I (GLO-I), to determine the impact of intracellular glycation on vascular function and the development of early renal changes in diabetes. METHODS: Wild-type and Glo1-overexpressing rats were rendered diabetic for a period of 24 weeks by intravenous injection of streptozotocin. Mesenteric arteries were isolated to study ex vivo vascular reactivity with a wire myograph and kidneys were processed for histological examination. Glycation was determined by mass spectrometry and immunohistochemistry. Markers for inflammation, endothelium dysfunction and renal dysfunction were measured with ELISA-based techniques. RESULTS: Diabetes-induced formation of AGEs in mesenteric arteries and endothelial dysfunction were reduced by Glo1 overexpression. Despite the absence of advanced nephrotic lesions, early markers of renal dysfunction (i.e. increased glomerular volume, decreased podocyte number and diabetes-induced elevation of urinary markers albumin, osteopontin, kidney-inflammation-molecule-1 and nephrin) were attenuated by Glo1 overexpression. In line with this, downregulation of Glo1 in cultured endothelial cells resulted in increased expression of inflammation and endothelium dysfunction markers. In fully differentiated cultured podocytes incubation with MGO resulted in apoptosis. CONCLUSIONS/INTERPRETATION: This study shows that effective regulation of the GLO-I enzyme is important in the prevention of vascular intracellular glycation, endothelial dysfunction and early renal impairment in experimental diabetes. Modulating the GLO-I pathway therefore may provide a novel approach to prevent vascular complications in diabetes.