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The crosstalk between vascular pericytes and endothelial cells (ECs) is critical for microvascular stabilization and remodeling; however, the crosstalk is often disrupted by diabetes, leading to severe and even lethal vascular damage. Circular RNAs are a class of endogenous RNAs that regulate several important physiological and pathological processes. Here we show that diabetes-related stress up-regulates cPWWP2A expression in pericytes but not in ECs. In vitro studies show that cPWWP2A directly regulates pericyte biology but indirectly regulates EC biology via exosomes carrying cPWWP2A. cPWWP2A acts as an endogenous miR-579 sponge to sequester and inhibit miR-579 activity, leading to increased expression of angiopoietin 1, occludin, and SIRT1. In vivo studies show that cPWWP2A overexpression or miR-579 inhibition alleviates diabetes mellitus-induced retinal vascular dysfunction. By contrast, inhibition of cPWWP2A-mediated signaling by silencing cPWWP2A or overexpressing miR-579 aggravates retinal vascular dysfunction. Collectively, this study unveils a mechanism by which pericytes and ECs communicate. Intervention of cPWWP2A or miR-579 expression may offer opportunities for treating diabetic microvascular complications. [ABSTRACT FROM AUTHOR]