Endothelial dysfunction comprises a number of functional alterations in the vascular endothelium that are associated with diabetes and cardiovascular disease, including changes in vasoregulation, enhanced generation of reactive oxygen intermediates, inflammatory activation, and altered barrier function. Hyperglycemia is a characteristic feature of type 1 and type 2 diabetes and plays a pivotal role in diabetes-associated microvascular complications. Although hyperglycemia also contributes to the occurrence and progression of macrovascular disease (the major cause of death in type 2 diabetes), other factors such as dyslipidemia, hyperinsulinemia, and adipose-tissue-derived factors play a more dominant role. A mutual interaction between these factors and endothelial dysfunction occurs during the progression of the disease. We pay special attention to the possible involvement of endoplasmic reticulum stress (ER stress) and the role of obesity and adipose-derived adipokines as contributors to endothelial dysfunction in type 2 diabetes. The close interaction of adipocytes of perivascular adipose tissue with arteries and arterioles facilitates the exposure of their endothelial cells to adipokines, particularly if inflammation activates the adipose tissue and thus affects vasoregulation and capillary recruitment in skeletal muscle. Hence, an initial dysfunction of endothelial cells underlies metabolic and vascular alterations that contribute to the development of type 2 diabetes.