Type 2 diabetes is associated with significantly accelerated rates of macrovascular complications such as atherosclerosis. Emerging evidence now indicates that atherosclerosis is an inflammatory disease and that certain inflammatory markers may be key predictors of diabetic atherosclerosis. Proinflammatory cytokines and cellular adhesion molecules expressed by vascular and blood cells during stimulation by growth factors and cytokines seem to play major roles in the pathophysiology of atherosclerosis and diabetic vascular complications. However, more recently, data suggest that inflammatory responses can also be elicited by smaller oxidized lipids that are components of atherogenic oxidized low-density lipoprotein or products of phospholipase activation and arachidonic acid metabolism. These include oxidized lipids of the lipoxygenase and cyclooxygenase pathways of arachidonic acid and linoleic acid metabolism. These lipids have potent growth, vasoactive, chemotactic, oxidative, and proinflammatory properties in vascular smooth muscle cells, endothelial cells, and monocytes. Cellular and animal models indicate that these enzymes are induced under diabetic conditions, have proatherogenic effects, and also mediate the actions of growth factors and cytokines. This review highlights the roles of the inflammatory cyclooxygenase and 12/15-lipoxygenase pathways in the pathogenesis of diabetic vascular disease. Evidence suggests that inflammatory responses in the vasculature can be elicited by small oxidized lipids that are components of oxidized low-density lipoprotein or products of the lipoxygenase and cyclooxygenase pathways of arachidonic and linoleic acid metabolism. This review evaluates these inflammatory and proatherogenic pathways in the pathogenesis of diabetic vascular disease.