C-peptide is a bioactive peptide with a potentially protective role in diabetes complications; however, its molecular mechanism of protection against cardiovascular damage caused by hyperglycemia-induced apoptosis remains unclear. We investigated the protective mechanism of C-peptide against hyperglycemia-induced apoptosis using human umbilical vein endothelial cells and streptozotocin diabetic mice. High glucose (33 mmol/L) induced apoptotic cell death in endothelial cells via sequential elevation of intracellular Ca2+ and reactive oxygen species (ROS) as well as subsequent activation of transglutaminase 2 (TG2). C-peptide (1 nmol/L) prevented endothelial cell death by inhibiting protein kinase C– and NADPH oxidase–dependent intracellular ROS generation and by abolishing high glucose–induced TG2 activation, without affecting intracellular Ca2+ levels. Consistently, in the aorta of streptozotocin diabetic mice, hyperglycemia stimulated transamidating activity and endothelial cell apoptosis that was inhibited by C-peptide replacement therapy (35 pmol/min/kg) using osmotic pumps (control and diabetes, n = 8; diabetes + C-peptide, n = 7). In addition, C-peptide prevented hyperglycemia-induced activation of transamidation activity and apoptosis in the heart and renal cortex of streptozotocin diabetic mice. Thus, C-peptide protects endothelial cells from hyperglycemia-induced apoptotic cell death by inhibiting intracellular ROS-mediated activation of TG2. Furthermore, TG2 may be a promising avenue of therapeutic investigation to treat diabetic vasculopathies.