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Aims: Diabetes increases oxidative stress in the retina and dysfunctions their mitochondria, accelerating capillary cell apoptosis. A 66 kDa adaptor protein, p66Shc, is considered as a sensor of oxidative stress-induced apoptosis. In the pathogenesis of diabetic retinopathy, a progressive disease, reactive oxygen species (ROS) production by activation of a small molecular weight G-protein (Ras-related C3 botulinum toxin substrate 1 [Rac1])-Nox2 signaling precedes mitochondrial damage. Rac1 activation is facilitated by guanine exchange factors (GEFs), and p66Shc increases Rac1-specific GEF activity of Son of Sevenless 1 (Sos1). p66Shc also possesses oxidoreductase activity and can directly stimulate mitochondrial ROS generation. Our aim was to investigate the role of p66Shc in the development of diabetic retinopathy and mechanism of its transcription., Results: High glucose increased p66Shc expression in human retinal endothelial cells, and elevated acetylated histone 3 lysine 9 (H3K9) levels and transcriptional factor p53 binding at its promoter. Glucose also augmented interactions between Rac1 and Sos1 and activated Rac1-Nox2. Phosphorylation of p66Shc was increased, allowing it to interact with peptidyl prolyl isomerase to facilitate its localization inside the mitochondria, culminating in mitochondrial damage. P66shc-small interfering RNA (siRNA) inhibited glucose-induced Rac1 activation and mitochondrial damage. Similar results are observed in retinal microvessels from diabetic rats., Innovation: This is the first report identifying the role of p66Shc in the development of diabetic retinopathy and implicating increased histone acetylation in its transcriptional regulation., Conclusion: Thus, p66Shc has dual role in the development of diabetic retinopathy; its regulation in the early stages of the disease should impede Rac1-ROS production and, in the later stages, prevent mitochondrial damage and initiation of a futile cycle of free radicals.