5,6,7,8-tetrahydrobiopterin (BH4) is an essential cofactor of NO synthases. Oxidation of BH4, in the setting of diabetes and other chronic vasoinflammatory conditions, can cause cofactor insufficiency and uncoupling of endothelial NO synthase (eNOS), manifest by a switch from NO to superoxide production. Here, we tested the hypothesis that eNOS uncoupling is not simply a consequence of BH4 insufficiency, rather it results from a diminished ratio of BH4 vs. its catalytically-incompetent oxidation product, 7,8,-dihydrobiopterin (BH2). In support, [³H]-BH4 binding studies revealed that BH4 and BH2 bind eNOS with equal affinity (Kd 80 nM) and BH2 can rapidly and efficiently replace BH4 in preformed eNOS-BH4 complexes. Whereas the total biopterin pool of murine endothelial cells (EC) was unaffected by 48 h exposure to diabetic glucose levels (30 mM), BH2 levels increased from undetectable to 40% of total biopterin. This BH2 accumulation was associated with diminished A23187-evoked NO activity and accelerated superoxide production. Since superoxide production was suppressed by NOS-inhibitor treatment, eNOS was implicated as a principal superoxide source. Importantly, BH4 supplementation of EC (in low and high glucose-containing media) revealed that A23187-evoked NO bioactivity correlates with intracellular BH4:BH2, and not absolute intracellular levels of BH4. Reciprocally, superoxide production was found to negatively correlate with intracellular BH4:BH2. Hyperglycemia-associated BH4 oxidation and NO insufficiency was recapitulated in vivo, in the Zucker Diabetic Fatty rat model of type II diabetes. Together, these findings implicate diminished intracellular BH4:BH2, rather than BH4 depletion per se, as the molecular trigger for NO insufficiency in diabetes.