Cardiovascular complications of diabetes are a leading cause of morbidity and mortality. Vascular endothelial dysfunction (VED) is strongly implicated in the pathogenesis of diabetic vascular complications. Impaired endothelial cell (EC) production of nitric oxide (NO) is a main characteristic of VED. In ECs, NO is produced by endothelial nitric oxide synthase enzyme (eNOS), by utilizing Larginine. Arginase in ECs also uses L-arginine as a substrate to produce urea and ornithine. Recently arginase upregulation has been shown to play a role in vascular dysfunction in diabetes by limiting Larginine bioavailability to eNOS and thus limiting NO production. We performed analysis of arginase activity in type 2 diabetic patients. Arginase activity was elevated in type 2 diabetic patients as compared to age-matched healthy volunteers. Levels of arginase activity have positive correlation with HbA1c levels in diabetic patients (R2=0.8 Pearson r=0.87). Cell studies also agreed with these findings, as high glucose (25 mmol/L, 72 h) treatment to ECs resulted in a 66% increase in arginase activity. This increase in arginase activity was concomitant with a 27% drop in NO produced by EC. Inhibition of arginase by ABH (100 umol/L) restored NO level to normal. Collectively, our results indicate that diabetic state causes an elevation of arginase activity which can limit EC production of NO and thus impairs vasorelaxation. Arginase can be regarded as a novel marker for the vascular complications of diabetes. Drugs targeting arginase or its signaling pathway may show benefits in delaying or preventing these vascular complications of the disease.