Diabetic vascular complication is a leading cause of acquired blindness, end-stage renal failure, a variety of neuropathies and accelerated atherosclerosis, which could account for disabilities and high mortality rates in patients with diabetes. Chronic hyperglycemia is essentially involved in the development and progression of diabetic micro- and macroangiopathy. Among various metabolic derangements implicated in the pathogenesis of diabetic vascular complication, advanced glycation end product (AGE) hypothesis is most compatible with the theory of 'hyperglycemic memory'. In this review, we discuss the molecular mechanisms of diabetic vascular complication, specially focusing on AGEs and their receptor (RAGE) system. Several types of AGE inhibitors and their therapeutic implications in this devastating disorder are also discussed here.