Impaired endothelial nitric oxide synthase (eNOS) activity may be involved in the pathogenesis of diabetic nephropathy. To test this, we used the type 2 diabetic db/db mouse (BKS background) model and found impaired eNOS dimerization and phosphorylation along with moderate glomerular mesangial expansion and increased glomerular basement membrane (GBM) thickness at 34 weeks of age. Cultured murine glomerular endothelial cells exposed to high glucose had similar alterations in eNOS dimerization and phosphorylation. Treatment with sepiapterin, a stable precursor of the eNOS cofactor tetrahydrobiopterin, or the nitric oxide precursor L-arginine corrected changes in eNOS dimerization and phosphorylation, corrected permeability defects, and reduced apoptosis. Sepiapterin or L-arginine, administered to db/db mice from weeks 26 to 34, did not significantly alter hyperfiltration or affect mesangial expansion, but reduced albuminuria and GBM thickness, and decreased urinary isoprostane and nitrotyrosine excretion (markers of oxidative stress). Although there was no change in glomerular eNOS monomer expression, both sepiapterin and L-arginine partially reversed the defect in eNOS dimerization and phosphorylation. Hence, our results support an important role for eNOS dysfunction in diabetes and suggest that sepiapterin supplementation might have therapeutic potential in diabetic nephropathy.