Complications of diabetes have been the leading cause of mortality and morbidity in both type 1 and type 2 diabetes. Based on the sites of functional and pathological changes, these complications have been characterized as cardiomyopathy, macrovasculopathy, and microvasculopathy. Multiple clinical studies have shown that glycemic control is by far the most effective approach in the prevention of microvascular and neuropathic complications. However, tight glycemic control is still difficult to achieve using current available regimen, and therefore novel pathogenesis‐based interventions that can prevent and reverse the complications even in the presence of hyperglycemia are needed. Over the past decade, advances in molecular and cellular biological techniques have revealed many potential mechanisms utilized by hyperglycemia to induce its adverse effects. Several mechanisms, including vascular oxidative stress; formation of advanced glycation endproducts; activation of protein kinase C; increased flux through hexosamine pathway; inflammation‐induced vascular pathology; altered expression and actions of growth factors, cytokines, and vasomotor mediators; and increased flux through polyol pathway, have been studied in detail. The identification of such mechanisms has lead to the development of novel pharmacological approaches.