Angiotensin II (Ang II) levels are increased in patients with diabetes, but mechanisms underlying its contribution to diabetic vascular diseases are incompletely understood. We recently reported that in aortic endothelial cells, Ang II induces endothelial nitric oxide synthase (eNOS) uncoupling to produce superoxide (O(2)*(-)) rather than nitric oxide (NO*), upon loss of the tetrahydrobiopterin (H(4)B) salvage enzyme dihydrofolate reductase (DHFR). Here, we found that streptozotocin-induced diabetic mice had a marked increase in aortic O(2)*(-) production, which was inhibited by N-nitro-l-arginine methyl ester hydrochloride, indicating uncoupling of eNOS. Ang II receptor type 1 blocker candesartan or ACE inhibitor captopril markedly attenuated eNOS-derived O(2)*(-) and hydrogen peroxide production while augmenting NO* bioavailability in diabetic aortas, implicating recoupling of eNOS. O(2)*(-) and NO* production were characteristically and quantitatively measured by electron spin resonance. DHFR expression was decreased in diabetic aortas but significantly restored by candesartan or captopril. Either also improved vascular H(4)B content and endothelium-dependent vasorelaxation in diabetes. Rac1-dependent NAD(P)H oxidase (NOX) activity was more than doubled in the endothelium-denuded diabetic aortas but was attenuated by candesartan or captopril, indicating that NOX remains active in nonendothelial vascular tissues, although uncoupled eNOS is responsible for endothelial production of O(2)*(-). These data demonstrate a novel role of Ang II in diabetic uncoupling of eNOS and that Ang II-targeted therapy improves endothelial function via the novel mechanism of recoupling eNOS. Dual effectiveness on uncoupled eNOS and NOX may explain the high efficacy of Ang II antagonists in restoring endothelial function.