The vascular system is the first organ system to develop in the embryo and its maldevelopment induced by hyperglycemia has serious consequences including embryonic and perinatal lethality. We previously reported that the state of phosphorylation/dephosphorylation of the vascular system specific cell adhesion molecule PECAM-1 correlates with development of vitelline vasculature. PECAM-1 is highly tyrosine phosphorylated prior to vessel formation, and dephosphorylated when the interconnecting circulation between the yolk sac and the embryo is established. We hypothesized that in diabetes-related embryopathy there is alteration of PECAM-1 phosphorylation state and this adversely affects an integrin mediated signal transduction pathway. We utilized an in vitro whole embryo culture system as a model for in situ vasculogenesis. Conceptuses were cultured between 7.5 and 9.5 days p.c. in control (glucose levels: 7.4-9.5 mMol) and in hyperglycemic (25 mMol) rat serum for 48 hr. An arrest of yolk sac vessel development at the primitive capillary plexus stage with aberrant arborization was present in the hyperglycemic condition. This yolk sac vasculopathy always accompanied a malformation of the embryos (malformation in axial rotation, open neural tube, heart defects) when conceptuses were harvested prior to the late headfold stage. A 3 hr period of hyperglycemia was sufficient to elicit yolk sac vasculopathy during this susceptible time of development. Exposure to the same high glucose environment in conceptuses past the late headfold stage was not sufficient to elicit yolk sac vasculopathy. Immunoprecipitation-Western blot analyses revealed that PECAM-1 remained highly tyrosine phosphorylated in the hyperglycemia-exposed malformed conceptuses at the end of organogenesis, in contrast to its dephosphorylated state in normally developing age matched controls. We also found that PECAM-1 in hyperglycemia-exposed conceptuses co-precipitates with the phosphatase SHPTP2. These data indicate that the cell adhesion molecule PECAM-1 is involved in vasculogenesis and its dephosphorylation is delayed/arrested in hyperglycemia-related embryopathy. Thus, modulation of PECAM-1 cytoplasmic tyrosine residues Y663 and Y686 which comprise part of PECAM-1's ITAM domain is postulated to have effect on signaling and/or adaptor molecule binding and subsequent transduction pathways influencing vasculo-and angiogenesis.