Background: Vascular endothelial function is compromised in people with diabetes reducing tissue blood flow. The present investigation was a logical extension of a previous work, examining isometric exercise performance and recovery in people with diabetes and the impact of the insulin sensitizer rosiglitazone, a drug shown to improve endothelial function. Material/Methods: Blood pressure, heart rate and limb blood flow were examined in 12 control subjects and 8 subjects with type 2 diabetes during a series of 2 fatiguing isometric contractions at a tension of 40% of the maximum strength of the handgrip muscles; 5 minutes of rest were allowed between the contractions. Results: Endurance of the first and the second contraction was significantly less in subjects with diabetes (p < 0.01). HR increased significantly (p < 0.01) by over three fold during exercise in control subjects compared to subjects with diabetes. There was no statistical difference in the increase in either systolic or diastolic BP during isometric exercise comparing controls to subjects with Type 2 diabetes (p > 0.05), however, resting and peak blood pressures were greater in subjects with type 2 diabetes (p < 0.01). Forearm blood flow, which was significantly lower at rest (p < 0.01) in subjects with diabetes, only increased by about half as much during the exercise in subjects compared to control subjects. These differences were partially reversed after 3 months administration of rosiglitazone. Conclusions: Microcirculatory damage in diabetes impairs exercise performance and recovery and can be partially reversed after rosiglitazone administration.