Excessive proliferation of vascular smooth muscle cells (VSMCs) is one of the primary lesions in atherosclerosis development during diabetes. High glucose triggers VSMC proliferation and initiates activation of the transcription factor nuclear factor (NF)-kappaB. Recently, clinical studies have demonstrated that replacement therapy with C-peptide, a cleavage product of insulin, to type 1 diabetic (T1D) patients is beneficial on a variety of diabetes-associated vascular complications. However, the mechanisms underlying the beneficial activity of C-peptide on the vasculature in conditions of hyperglycemia are largely unknown. The effects of C-peptide on the proliferation of human umbilical artery smooth muscle cell (UASMC) and aortic smooth muscle cell (AoSMC) lines cultured under high glucose for 48 h were tested. To gain insights on potential intracellular signaling pathways affected by C-peptide, we analyzed NF-kappaB activation in VSMCs since this pathway represents a key mechanism for the accelerated vascular disease observed in diabetes. High glucose conditions (25 mmol/L) stimulated NF-kappaB-dependent VSMC proliferation since the addition of two NF-kappaB-specific inhibitors, BAY11-7082 and PDTC, prevented proliferation. C-peptide at the physiological concentrations of 0.5 and 1 nmol/L decreased high glucose-induced proliferation of VSMCs that was accompanied by decreased phosphorylation of IkappaB and reduced NF-kappaB nuclear translocation. These results suggest that in conditions of hyperglycemia C-peptide reduces proliferation of VSMCs and NF-kappaB nuclear translocation. In patients with T1D, physiological C-peptide levels may exert beneficial effects on the vasculature that, under high glucose conditions, is subject to progressive dysfunction.