Mitochondria play cornerstone role in cellular metabolism and mitochondrial fragmentation, swelling and loss of cristae, epigenetic changes in mitochondrial DNA, reduction of transport proteins, and mitochondria-ER regulation precede histopathological abnormalities in DR. Recent studies demonstrate that mitochondrial transfer can rescue cells from bioenergetic abnormalities and cell death [1-8]. We propose that normalization of retinal endothelial cell bioenergetics by mitochondrial transfer can prevent retinal vascular degeneration and provide a novel breakthrough approach to treatment of DR. Accumulating evidence suggests that retinal vascular degeneration occurs when diabetic metabolic insult causes both retinal damage and defective repair by bone marrow-derived circulating vascular reparative cells, called CD34+ cells based on the critical surface marker that identifies them for isolation. In healthy subjects, CD34+ cells participate in the retinal vascular repair process by migrating and homing to the site of endothelial injury, while this capability is lost in CD34+ cells from diabetic subjects with vascular complications. Previously, we demonstrated that bone marrow pathology with CD34+ cell dysfunction precedes and is necessary for retinal vascular degeneration in diabetes. CD34+ cells repair by paracrine mechanism and was recently shown to include mitochondrial transfer nanotunnels or through extracellular vesicles-mediated mechanism. Release of mitochondrial DNA and proteins by damaged retinal endothelial cells stimulate mitochondrial biogenesis in stem/progenitor cells followed by the transfer of mitochondria to the injured resident cells. Alterations that impair the ability of diabetic CD34+ cells to repair injured vascular cells are not completely understood and will be studied in this application. is one of the questions addressed in this application. We hypothesize that retinal endothelial cells (REC) mitochondria are damaged and mitochondria are not repaired because of deficiency in i) initiation of mitochondrial transfer by CD34+ cells, ii) quality of CD34+cell mitochondria, and iii) the CD34+ cells sensing of resident endothelial cell mtDNA/proteins released during injury. To test hypothesis, the following Specific Aims will be addressed: Aim 1: To determine the signals and mechanisms that initiate repair of damaged retinal endothelial cells by mitochondrial transfer. Aim 2: To examine the mitochondrial transfer by CD34+ cells from diabetic and nondiabetic donors in db/db mice.