The unifying hypothesis of diabetes maintains that reactive oxygen species (ROS) generated in the mitochondria of glucose-treated cells promote reactions leading to the development of diabetic complications. Although the unifying hypothesis attributes the generation of oxidants solely to impaired glucose and fatty acid metabolism, diabetes is also associated with a decline in the levels of the endogenous antioxidant taurine in a number of tissues, raising the possibility that changes in taurine status might also contribute to the severity of oxidant-mediated damage. There is overwhelming evidence that taurine blocks toxicity caused by oxidative stress, but the mechanism underlying the antioxidant activity remains unclear. One established antioxidant action of taurine is the detoxification of hypochlorous acid. However, not all of the antioxidant actions of taurine are related to hypochlorous acid because they are detected in isolated cell systems lacking neutrophils. There are a few studies showing that taurine either modulates the antioxidant defenses or blocks the actions of the oxidants, but other studies oppose this interpretation. Although taurine is incapable of directly scavenging the classic ROS, such as superoxide anion, hydroxyl radical, and hydrogen peroxide, there are numerous studies suggesting that it is an effective inhibitor of ROS generation. The present review introduces a novel antioxidant hypothesis, which takes into consideration the presence of taurine-conjugated tRNAs in the mitochondria. Because tRNA conjugation is required for normal translation of mitochondrial-encoded proteins, taurine deficiency reduces the expression of these respiratory chain components. As a result, flux through the electron transport chain decreases. The dysfunctional respiratory chain accumulates electron donors, which divert electrons from the respiratory chain to oxygen, forming superoxide anion in the process. Restoration of taurine levels increases the levels of conjugated tRNA, restores respiratory chain activity, and increases the synthesis of ATP at the expense of superoxide anion production. The importance of this and other actions of taurine in diabetes is discussed.