The reactive advanced glycation endproduct (AGE) precursor methylglyoxal (MGO) and MGO-derived AGEs are associated with diabetic vascular complications and also with an increase in oxidative stress. Glyoxalase-I (GLO-I) transgenic rats were used to explore whether overexpression of this MGO detoxifying enzyme reduces levels of AGEs and oxidative stress in a rat model of diabetes. Rats were made diabetic with streptozotocin and after 12 weeks, plasma and multiple tissues were isolated for analysis of AGEs, carbonyl stress and oxidative stress. GLO-I activity was significantly elevated in multiple tissues of all transgenic rats compared with wild type (WT) littermates. Streptozotocin treatment resulted in a fivefold increase in blood glucose concentrations irrespective of GLO-I overexpression. Levels of MGO, glyoxal (GO), 3-deoxyglucosone, AGEs and oxidative stress markers nitrotyrosine, malondialdehyde and F2-isoprostane were elevated in the diabetic WT rats. In diabetic GLO-I rats, GO and MGO composite scores were significantly decreased by 81%, and plasma AGEs and oxidative stress markers scores by approximately 50%. Hyperglycemia induced a decrease in protein levels of the mitochondrial oxidative phosphorylation complex in the gastrocnemius muscle, which was accompanied by an increase in the lipid peroxidation product 4-hydroxy-2-nonenal, and this was counteracted by GLO-I overexpression. This study shows for the first time, in an in vivo model of diabetes, that GLO-I overexpression reduces hyperglycemia-induced levels of carbonyl stress, AGEs and oxidative stress. The reduction of oxidative stress by GLO-I overexpression directly demonstrates the link between glycation and oxidative stress.