Pregestational diabetes disrupts neurulation leading to neural tube defects (NTDs). Oxidative stress resulting from reactive oxygen species (ROS) plays a central role in the induction of NTD formation in diabetic pregnancies. We aimed to determine whether mitochondrial dysfunction increases ROS production leading to oxidative stress and diabetic embryopathy. Overexpression of the mitochondrion-specific antioxidant enzyme superoxide dismutase 2 (SOD2) in a transgenic (Tg) mouse model significantly reduced maternal diabetes-induced NTDs. SOD2 overexpression abrogated maternal diabetes-induced mitochondrial dysfunction by inhibiting mitochondrial translocation of the pro-apoptotic Bcl-2 family members, reducing the number of defective mitochondria in neuroepithelial cells, and decreasing mitochondrial membrane potential. Furthermore, SOD2 overexpression blocked maternal diabetes-increased ROS production by diminishing dihydroethidium staining signals in the developing neuroepithelium, and reducing the levels of nitrotyrosine-modified proteins and lipid hydroperoxide level in neurulation stage embryos. SOD2 overexpression also abolished maternal diabetes-induced endoplasmic reticulum stress. Finally, caspase-dependent neuroepithelial cell apoptosis enhanced by oxidative stress was significantly reduced by SOD2 overexpression. Thus, our findings support the hypothesis that mitochondrial dysfunction in the developing neuroepithelium enhances ROS production, which leads to oxidative stress and endoplasmic reticulum (ER) stress. SOD2 overexpression blocks maternal diabetes-induced oxidative stress and ER stress, and reduces the incidence of NTDs in embryos exposed to maternal diabetes.