Diabetes confers greater restenosis from neointimal hyperplasia following vascular interventions. While localized administration of nitric oxide (NO) is known to inhibit neointimal hyperplasia, the effect of NO in type 1 diabetes is unknown. Thus the aim of this study was to determine the efficacy of NO following arterial injury, with and without exogenous insulin administration. Vascular smooth muscle cells (VSMC) from lean Zucker (LZ) rats were exposed to the NO donor, DETA/NO, following treatment with different glucose and/or insulin concentrations. DETA/NO inhibited VSMC proliferation in a concentration-dependent manner to a greater extent in VSMC exposed to normal-glucose vs. high-glucose environments, and even more effectively in normal-glucose/high-insulin and high-glucose/high-insulin environments. G(0)/G(1) cell cycle arrest and cell death were not responsible for the enhanced efficacy of NO in these environments. Next, type 1 diabetes was induced in LZ rats with streptozotocin. The rat carotid artery injury model was performed. Type 1 diabetic rats experienced no significant reduction in neointimal hyperplasia following arterial injury and treatment with the NO donor PROLI/NO. However, daily administration of insulin to type 1 diabetic rats restored the efficacy of NO at inhibiting neointimal hyperplasia (60% reduction, P < 0.05). In conclusion, these data demonstrate that NO is ineffective at inhibiting neointimal hyperplasia in an uncontrolled rat model of type 1 diabetes; however, insulin administration restores the efficacy of NO at inhibiting neointimal hyperplasia. Thus insulin may play a role in regulating the downstream beneficial effects of NO in the vasculature.