Endothelial dysfunction is a central hallmark of diabetes. The transcriptional coactivator PGC-1α is a powerful regulator of metabolism, but its role in endothelial cells remains poorly understood. We show here that endothelial PGC-1α expression is high in diabetic rodents and humans and that PGC-1α powerfully blocks endothelial migration in cell culture and vasculogenesis in vivo. Mechanistically, PGC-1α induces Notch signaling, blunts activation of Rac/Akt/eNOS signaling, and renders endothelial cells unresponsive to established angiogenic factors. Transgenic overexpression of PGC-1α in the endothelium mimics multiple diabetic phenotypes, including aberrant re-endothelialization after carotid injury, blunted wound healing, and reduced blood flow recovery after hindlimb ischemia. Conversely, deletion of endothelial PGC-1α rescues the blunted wound healing and recovery from hindlimb ischemia seen in type 1 and type 2 diabetes. Endothelial PGC-1α thus potently inhibits endothelial function and angiogenesis, and induction of endothelial PGC-1α contributes to multiple aspects of vascular dysfunction in diabetes.