Increased heme oxygenase-1 (HO-1) expression improves vascular function by decreasing superoxide and increasing antioxidant levels. We therefore examined if HO-1 induction increased serum adiponectin levels and ameliorated vascular dysfunction in Type 1 diabetes. Administration of either carbon monoxide (CORM-3) or the HO-1 inducers, Resveratrol, and cobalt protoporphyrin (CoPP), increased serum levels of adiponectin (high molecular weight) in diabetic (streptozotocin; STZ-induced) Sprague Dawley rats. Resveratrol and CoPP administration increased HO-1 protein expression and HO activity in the aorta and significantly (p<0.05) increased serum adiponectin levels, compared to untreated diabetic rats. The results obtained with the CO releasing molecule, CORM-3, indicate a direct involvement of CO leading to increased levels of adiponectin. The increase in adiponectin was associated with a significant decrease in circulating endothelial cells (CEC) (p<0.002), decreased EC fragmentations and a significant increase in thrombomodulin (TM) and CD31(+) cells (p<0.05). Increased adiponectin levels were associated with a decrease in TNF-alpha-induced ICAM-1 and VCAM-1 and caspase 3 activity in endothelial cells while phosphorylation of eNOS at Ser-1179 increased. The adiponectin mediated increase in peNOS and pAKT was prevented by the phosphatidylinositol-3 kinase inhibitor, LY294002. In conclusion, there appears to be a temporal HO-1-adiponectin relationship that has a key role in vascular protection in Type 1 diabetes via a mechanism that involves increased levels of carbon monoxide.