We investigated the effect of niacin (nicotinic acid prolonged release) on forearm vasodilatory function and arterial compliance in statin-treated type 2 diabetic patients with endothelial dysfunction. In a parallel group study, we randomised 15 subjects, with LDL-cholesterol ≤2.5 mmol/L, to niacin (dose titrated to 1500 mg/day over 8 weeks, then maintained for a further 12 weeks) or no additional treatment. Niacin increased maximal post-ischaemic forearm blood flow (mean ± SEM 6.4±2.4 vs. -2.3±1.2 ml/100 ml/min, p = 0.001) and small artery compliance (1.3±0.8 vs. -2.3±1.1 ml/mmHg, p = 0.01) compared with no additional treatment, but did not alter large artery compliance, blood pressure nor heart rate. Niacin decreased serum triglycerides by 47% (p = 0.04), with no change in LDL-cholesterol, HDL-cholesterol, apolipoprotein (Apo) B-100 nor ApoA-I (p > 0.05). Adding niacin to statin therapy improves small artery vasodilatory function and compliance in type 2 diabetes. This may relate to a decrease in serum triglycerides and/or a direct benefit of niacin on vascular biology.