To understand how endothelial cell (EC) dysfunction contributes to the failure of arteriovenous graft (AVG), we investigated the role of fibroblast-specific protein 1 (FSP-1) in cultured ECs and a mouse AVG model. In vitro, we uncovered a new FSP-1-dependent pathway that activates rho-associated, coiled-coil-containing protein kinase 1 (ROCK1) in ECs, leading to phosphorylation of myosin light chain 2 resulting in EC dysfunction. In cultured ECs, high glucose stimulated FSP-1 expression and increased permeability of an EC monolayer. The increase in permeability by the high glucose concentration was mediated by FSP-1 expression. Treatment of cultured ECs with FSP-1 caused leakage of the endothelial barrier plus increased expression of adhesion molecules and decreased expression of junction molecules. These responses were initiated by binding of FSP-1 to receptor for advanced glycation endproducts, which resulted in ROCK1 activation. In vivo, diabetes increased infiltration of inflammatory cells into AVGs and stimulated neointima formation. Increased FSP-1 expression and ROCK1 activation were found in AVGs of diabetic mice. Blocking FSP-1 suppressed diabetes-induced ROCK1 activation in AVGs. In mice with FSP-1 knockout or with ROCK1 knockout, accumulation of inflammatory cells and neointima formation in AVG were attenuated despite diabetes. Thus, mechanisms of inhibiting FSP-1 in ECs could improve AVG function.