Small coronary arteries (SCA) from diabetic rats exhibit enhanced peroxynitrite (ONOO(-)) formation and concurrent impairment of voltage-dependent potassium (K(v)) channel function. However, it is unclear whether ONOO(-) plays a causative role in this impairment. We hypothesized that functional loss of K(v) channels in coronary smooth muscle cells (SMC) in diabetes is due to ONOO(-) with subsequent tyrosine nitration of K(v) channel proteins. Diabetic rats and nondiabetic controls were treated with or without ebselen (Eb) for 4 wk. SCA were prepared for immunohistochemistry (IHC), immunoprecipitation (IP) followed by Western blot (WB), videomicroscopy, and patch-clamp analysis. IHC revealed excess ONOO(-) in SCA from diabetic rats. IP and WB revealed elevated nitration of the K(v)1.2 alpha-subunit and reduced K(v)1.2 protein expression in diabetic rats. Each of these changes was improved in Eb-treated rats. Protein nitration and K(v)1.5 expression were unchanged in SCA from diabetic rats. Forskolin, a direct cAMP activator that induces K(v)1 channel activity, dilated SCA from nondiabetic rats in a correolide (Cor; a selective K(v)1 channel blocker)-sensitive fashion. Cor did not alter the reduced dilation to forskolin in diabetic rats; however, Eb partially restored the Cor-sensitive component of dilation. Basal K(v) current density and response to forskolin were improved in smooth muscle cells from Eb-treated DM rats. We conclude that enhanced nitrosative stress in diabetes mellitus contributes to K(v)1 channel dysfunction in the coronary microcirculation. Eb may be beneficial for the therapeutic treatment of vascular complications in diabetes mellitus.