Abstract Bone marrow (BM)-derived vascular reparative cells, called myeloid angiogenic cells or MACs, are critical in vascular repair due to their ability to release growth factors and immunomodulatory proteins that promote endothelial survival and proliferation. MAC dysfunction in diabetes may lead to the imbalance between physiological repair and pathological inflammation. Cholesterol levels are pathologically increased in MACs from diabetic humans and mice leading to their dysfunction. Liver X receptor (LXR) activation restores membrane fluidity in the diabetic MACs and facilitates cell migration and vascular repair preventing vasodegenerative damage in the retinas of db/db mice (type 2 diabetes model). Recently, we made the novel observation that MACs are preferentially mobilized to the injured retina from the calvaria BM and not the long bones, while proinflammatory myeloid cells (myelopoiesis) are preferentially mobilized from the long bones. Calvaria BM does not increase in fat content with increasing age, whereas the long bones do (promoting myelopoiesis), supporting that the calvarium may be resilient to the adverse metabolic consequences of chronic diabetes. While we showed denervation in the long bones in STZ-induced T1D, T2D db/db mice and T2D rats (promoting myeloidosis), Ferraro et. al. identified neurogenesis in the calvarium of diabetic mice suggesting a differential response to diabetes in these two distinct BM compartments. Importantly, unlike the long bones, the calvarium is directly connected to the cerebral spinal fluid (CSF), a source of neurotropic and growth factors including endogenous LXR ligands. Hypothesis: In contrast to the long bones, the calvaria BM compartment is resistant to the adverse impact of diabetes because the CSF provides it with neurotrophic and growth factors sustaining hematopoiesis and adequate levels of MACs needed for vascular repair of the retina. In contrast, long bones succumb to denervation and myelopoiesis. Overtime, however, the calvarium loses this protective response shifting the balance towards systemic inflammation and development of DR. To evaluate this hypothesis, we propose the following aims. Aim 1: To interrogate the calvarium microenvironment (stromal cells, resident BM macrophages, and hematopoietic cells) by examining innervation by the sympathetic nervous system and changes in hematopoiesis over the time course of diabetes. Aim 2: To determine the time course of diabetes-induced changes in the release of BM compartment-specific myeloid cells and MACs that are recruited to the retina. Aim 3: To restore calvaria BM compartment in late-stage diabetes using targeted delivery of LXR agonists.