The endothelium, although only a single layer of cells lining the vascular and lymphatic systems, contributes in multiple ways to vascular homeostasis. Subsequent to the 1980 report by Robert Furchgott and John Zawadzki, there has been a phenomenal increase in our knowledge concerning the signalling molecules and pathways that regulate endothelial - vascular smooth muscle communication. It is now recognised that the endothelium is not only an important source of nitric oxide (NO), but also numerous other signalling molecules, including the putative endothelium-derived hyperpolarizing factor (EDHF), prostacyclin (PGI(2)), and hydrogen peroxide (H(2)O(2)), which have both vasodilator and vasoconstrictor properties. In addition, the endothelium, either via transferred chemical mediators, such as NO and PGI(2), and (or) low-resistance electrical coupling through myoendothelial gap junctions, modulates flow-mediated vasodilatation as well as influencing mitogenic activity, platelet aggregation, and neutrophil adhesion. Disruption of endothelial function is an early indicator of the development of vascular disease, and thus an important area for further research and identification of potentially new therapeutic targets. This review focuses on the signalling pathways that regulate endothelial - vascular smooth muscle communication and the mechanisms that initiate endothelial dysfunction, particularly with respect to diabetic vascular disease.