Objective of the Study: Diabetic patients have a much more widespread and aggressive form of atherosclerosis and therefore, higher risk for myocardial infarction, peripheral vascular disease and stroke, but the molecular mechanisms leading to accelerated damage are still unclear. Recently, we showed that hyperglycemia activates the transcription factor NFAT in the arterial wall, inducing the expression of the pro-atherosclerotic protein osteopontin. Here we investigate whether NFAT activation may be a link between diabetes and atherogenesis. Methodology and Principal Findings: Streptozotocin (STZ)-induced diabetes in apolipoprotein E2/2 mice resulted in 2.2 fold increased aortic atherosclerosis and enhanced pro-inflammatory burden, as evidenced by elevated blood monocytes, endothelial activation- and inflammatory markers in aorta, and pro-inflammatory cytokines in plasma. In vivo treatment with the NFAT blocker A-285222 for 4 weeks completely inhibited the diabetes-induced aggravation of atherosclerosis, having no effect in non-diabetic mice. STZ-treated mice exhibited hyperglycemia and higher plasma cholesterol and triglycerides, but these were unaffected by A-285222. NFAT-dependent transcriptional activity was examined in aorta, spleen, thymus, brain, heart, liver and kidney, but only augmented in the aorta of diabetic mice. A- 285222 completely blocked this diabetes-driven NFAT activation, but had no impact on the other organs or on splenocyte proliferation or cytokine secretion, ruling out systemic immunosuppression as the mechanism behind reduced atherosclerosis. Instead, NFAT inhibition effectively reduced IL-6, osteopontin, monocyte chemotactic protein 1, intercellular adhesion molecule 1, CD68 and tissue factor expression in the arterial wall and lowered plasma IL-6 in diabetic mice. Conclusions: Targeting NFAT signaling may be a novel and attractive approach for the treatment of diabetic macrovascular complications.