Oxidative stress [increased bioavailability of reactive oxygen species (ROS)] plays a role in the endothelial dysfunction and vascular inflammation, which underlie vascular damage in diabetes. Statins are cholesterol-lowering drugs that are vasoprotective in diabetes through unknown mechanisms. We tested the hypothesis that atorvastatin decreases NADPH oxidase (Nox)-derived ROS generation and associated vascular injury in diabetes. Leprdb/Leprdb (db/db) mice, a model of Type 2 diabetes and control Leprdb/Lepr+ (db/+) mice were administered atorvastatin (10 mg/kg per day, 2 weeks). Atorvastatin improved glucose tolerance in db/db mice. Systemic and vascular oxidative stress in db/db mice, characterized by increased plasma TBARS (thiobarbituric acid-reactive substances) levels and exaggerated vascular Nox-derived ROS generation respectively, were inhibited by atorvastatin. Cytosol-to-membrane translocation of the Nox regulatory subunit p47phox and the small GTPase Rac1/2 was increased in vessels from db/db mice compared with db/+ mice, an effect blunted by atorvastatin. The increase in vascular Nox1/2/4 expression and increased phosphorylation of redox-sensitive mitogen-activated protein kinases (MAPKs) was abrogated by atorvastatin in db/db mice. Pro-inflammatory signalling (decreased IκB-α and increased NF-κB p50 expression, increased NF-κB p65 phosphorylation) and associated vascular inflammation [vascular cell adhesion molecule-1 (VCAM-1) expression and vascular monocyte adhesion], which were increased in aortas of db/db mice, were blunted by atorvastatin. Impaired acetylcholine (Ach)- and insulin (INS)-induced vasorelaxation in db/db mice was normalized by atorvastatin. Our results demonstrate that, in diabetic mice, atorvastatin decreases vascular oxidative stress and inflammation and ameliorates vascular injury through processes involving decreased activation of Rac1/2 and Nox. These findings elucidate redox-sensitive and Rac1/2-dependent mechanisms whereby statins protect against vascular injury in diabetes.