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Background: Accelerated atherosclerosis is the leading cause of morbidity and mortality in diabetic patients. Hyperglycemia is a recognized independent risk factor for heightened atherogenesis in diabetes mellitus (DM). However, our understanding of the mechanisms underlying glucose damage to the vasculature remains incomplete. Methodology/Principal Findings: High glucose and hyperglycemia reduced upregulation of the NF-κB inhibitory and atheroprotective protein A20 in human coronary endothelial (EC) and smooth muscle cell (SMC) cultures challenged with Tumor Necrosis Factor alpha (TNF), aortae of diabetic mice following Lipopolysaccharide (LPS) injection used as an inflammatory insult and in failed vein-grafts of diabetic patients. Decreased vascular expression of A20 did not relate to defective transcription, as A20 mRNA levels were similar or even higher in EC/SMC cultured in high glucose, in vessels of diabetic C57BL/6 and FBV/N mice, and in failed vein grafts of diabetic patients, when compared to controls. Rather, decreased A20 expression correlated with post-translational O-Glucosamine-N-Acetylation (O-GlcNAcylation) and ubiquitination of A20, targeting it for proteasomal degradation. Restoring A20 levels by inhibiting O-GlcNAcylation, blocking proteasome activity, or overexpressing A20, blocked upregulation of the receptor for advanced glycation end-products (RAGE) and phosphorylation of PKCβII, two prime atherogenic signals triggered by high glucose in EC/SMC. A20 gene transfer to the aortic arch of diabetic ApoE null mice that develop accelerated atherosclerosis, attenuated vascular expression of RAGE and phospho-PKCβII, significantly reducing atherosclerosis. Conclusions: High glucose/hyperglycemia regulate vascular A20 expression via O-GlcNAcylation-dependent ubiquitination and proteasomal degradation. This could be key to the pathogenesis of accelerated atherosclerosis in diabetes.