Diabetic retinopathy (DR) and diabetic nephropathy (DN) are the most common microvascular complications of diabetes. DR is a leading cause of blindness, and DN is a major cause of end-stage renal diseases. Diabetic macular edema (DME) resulting from increased vascular permeability in the retina and retinal neovascularization (NV) represent two major pathological changes in DR and are the primary causes of vision loss in diabetic patients. Previous studies have shown that angiogenic factors such as vascular endothelial growth factor (VEGF) play a key role in the development of DME and retinal NV. Studies in recent years have demonstrated that a number of endogenous angiogenic inhibitors are present in the normal retina and counter act the effect of VEGF in the regulation of angiogenesis and vascular permeability. Decreased levels of angiogenic inhibitors in the vitreous and retina have been found in diabetic patients and diabetic animal models. The decreased levels of angiogenic inhibitors shift the balance between angiogenic factors and angiogenic inhibitors and consequently, lead to the development of DME and retinal NV. Recently, we have found that these angiogenic inhibitors are expressed at high levels in the normal kidney and are down-regulated in diabetes. Moreover, these inhibitors inhibit the activity of VEGF and TGF-beta, two major pathogenic factors of DN. Therefore, decreased levels of these angiogenic inhibitors in diabetes may be associated with pathologies of DN. This review will summarize recent progress in these fields and therapeutic approaches to use angiogenic inhibitors for the treatment of diabetic complications.