Microvascular barrier injury has been implicated in the initiation and progress of end organ complications of diabetic mellitus. Plasma leakage and fluid retention are seen in various tissues of diabetic patients or animals at the early stages of the disease before structural microangiopathy can be detected. Clinical and experimental evidence suggests that hyperglycemia, often accompanied with insulin deficiency or insulin resistance, causes impaired autoregulation and increased permeability in microvessels. Multiple molecular pathways have been identified as contributors to the altered fluid homeostasis, including increased polyol flux that promotes oxidative stress, advanced glycation that leads to carbonyl stress, and excessive glucose metabolism that results in protein kinase C activation. These abnormal metabolic activities are associated with the production of pro-inflammatory cytokines and growth factors, which can stimulate an array of signaling reactions and structural changes at the endothelial barrier and ultimately cause microvascular leakage. Interventions that manipulate these metabolic and inflammatory pathways have demonstrated efficacy in delaying the progress of diabetic microvascular complications; however, their direct effects and mechanisms of action on the microcirculation remain elusive. A deeper understanding of the molecular basis of diabetes-induced endothelial barrier dysfunction will provide a framework for the development of new therapeutic targets to treat this chronic and debilitating disease process.