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Long standing diabetes leads to structural and functional alterations in both the micro- and the macro-vasculature. Vascular endothelial cells (ECs) are the primary target of the hyperglycemia-induced adverse effects. Vascular stem cells that give rise to endothelial progenitor cells (EPCs) and mesenchymal progenitor cells (MPCs) represent an attractive target for cell therapy for diabetic patients. A number of studies have reported EPC dysfunction as a novel participant in the culmination of the diabetic complications. The controversy behind the identity of EPCs and the similarity between these progenitor cells to hematopoietic cells has led to conflicting results. MPCs, on the other hand, have not been examined for a potential role in the pathogenesis of the complications. These multipotent cells, however, do show a therapeutic role. In this article, we summarize the vascular changes that occur in diabetic complications highlighting some of the common features, the key findings that illustrate an important role of vascular stem cells (VSCs) in the pathogenesis of chronic diabetic complications, and provide mechanisms by which these cells can be used for therapy. © 2012 Keats and Khan; licensee BioMed Central Ltd.