Cellular apoptosis induced by hyperglycemia occurs in many vascular cells and is crucial for the initiation of diabetic pathologies. In the retina, pericyte apoptosis and the formation of acellular capillaries, the most specific vascular pathologies attributed to hyperglycemia, is linked to the loss of platelet-derived growth factor (PDGF)-mediated survival actions owing to unknown mechanisms. Here we show that hyperglycemia persistently activates protein kinase C-δ (PKC-δ, encoded by Prkcd) and p38α mitogen-activated protein kinase (MAPK) to increase the expression of a previously unknown target of PKC-δ signaling, Src homology-2 domain–containing phosphatase-1 (SHP-1), a protein tyrosine phosphatase. This signaling cascade leads to PDGF receptor-β dephosphorylation and a reduction in downstream signaling from this receptor, resulting in pericyte apoptosis independently of nuclear factor-κB (NF-κB) signaling. We observed increased PKC-δ activity and an increase in the number of acellular capillaries in diabetic mouse retinas, which were not reversible with insulin treatment that achieved normoglycemia. Unlike diabetic age-matched wild-type mice, diabetic Prkcd^−/− mice did not show activation of p38α MAPK or SHP-1, inhibition of PDGF signaling in vascular cells or the presence of acellular capillaries. We also observed PKC-δ, p38α MAPK and SHP-1 activation in brain pericytes and in the renal cortex of diabetic mice. These findings elucidate a new signaling pathway by which hyperglycemia can induce PDGF resistance and increase vascular cell apoptosis to cause diabetic vascular complications.