Bone marrow derived endothelial progenitor cells (EPCs) are early precursors of mature endothelial cells which replenish aging and damaged endothelial cells. The authors studied a diabetic swine model to determine if induction of DM adversely affects either bone marrow or circulating EPCs and whether a HMG-CoA reductase inhibitor (statin) improves development and recruitment of EPCs in the absence of cholesterol lowering. Streptozotocin was administered to Yorkshire pigs to induce DM. One month after induction, diabetic pigs were treated with atorvastatin (statin, n = 10), ezetimibe (n = 10) or untreated (n = 10) and evaluated for number of bone marrow and circulating EPCs and femoral artery endothelial function. There was no effect of either medication on cholesterol level. One month after induction of DM prior to administration of drugs, the number of bone marrow and circulating EPCs significantly decreased (P < 0.0001) compared to baseline. Three months after DM induction, the mean proportion of circulating EPCs significantly increased in the atorvastatin group, but not in the control or ezetimibe groups. The control group showed progressive reduction in percentage of flow mediated vasodilatation (no dilatation at 3 months) whereas the atorvastatin group and ezetimibe exhibited vasodilatation, 6% and 4% respectively. DM results in significant impairment of bone marrow and circulating EPCs as well as endothelial function. The effect is ameliorated, in part, by atorvastatin independent of its cholesterol lowering effect. These data suggest a model wherein accelerated atherosclerosis seen with DM may, in part, result from reduction in EPCs which may be ameliorated by treatment with a statin.