Hypoxia-induced pulmonary hypertension (HPH) is a progressive disease that is mainly caused by chronic exposure to high altitude, chronic obstructive lung disease, and obstructive sleep apnea. The increased pulmonary vascular resistance and increased pulmonary arterial pressure result in increased right ventricular afterload, leading to right heart failure and increased morbidity. There are several clinical reports suggesting a link between PH and diabetes, insulin resistance, or obesity; however, it is unclear whether HPH is associated with diabetes as a progressive complication in diabetes. The major goal of this study is to examine the effect of diabetic “preconditioning” or priming effect on the progression of HPH and define the molecular mechanisms that explain the link between diabetes and HPH. Our data show that HPH is significantly enhanced in diabetic mice, while endothelium-dependent relaxation in pulmonary arteries is significantly attenuated in chronically hypoxic diabetic mice (DH). In addition, we demonstrate that mouse pulmonary endothelial cells (MPECs) isolated from DH mice exhibit a significant increase in mitochondrial reactive oxygen species (ROS) concentration and decreased SOD2 protein expression. Finally, scavenging mitochondrial ROS by mitoTempol restores endothelium-dependent relaxation in pulmonary arteries that is attenuated in DH mice. These data suggest that excessive mitochondrial ROS production in diabetic MPECs leads to the development of severe HPH in diabetic mice exposed to hypoxia.