Retinal endothelial cell dysfunction is believed to play a key role in the etiology and pathogenesis of diabetic retinopathy. Numerous studies have shown that TRPV4 channels are critically involved in maintaining normal endothelial cell function. In the current paper, we demonstrate that TRPV4 is functionally expressed in the endothelium of the retinal microcirculation and that both channel expression and activity is downregulated by hyperglycaemia. Quantitative PCR and immunostaining demonstrated molecular expression of TRPV4 in cultured bovine retinal microvascular endothelial cells (RMECs). Functional TRPV4 activity was assessed in cultured RMECs from endothelial Ca2+-responses recorded using fura-2 microfluorimetry and electrophysiological recordings of membrane currents. The TRPV4 agonist 4α-phorbol 12,13-didecanoate (4-αPDD) increased [Ca2+]i in RMECs and this response was largely abolished using siRNA targeted against TRPV4. These Ca2+-signals were completely inhibited by removal of extracellular Ca2+, confirming their dependence on influx of extracellular Ca2+. The 4-αPDD Ca2+-response recorded in the presence of cyclopiazonic acid (CPA), which depletes the intracellular stores preventing any signal amplification through store release, was used as a measure of Ca2+-influx across the cell membrane. This response was blocked by HC067047, a TRPV4 antagonist. Under voltage clamp conditions, the TRPV4 agonist GSK1016790A stimulated a membrane current, which was again inhibited by HC067047. Following incubation with 25mM D-glucose TRPV4 expression was reduced in comparison with RMECs cultured under control conditions, as were 4αPDD-induced Ca2+-responses in the presence of CPA and ion currents evoked by GSK1016790A. Molecular expression of TRPV4 in the retinal vascular endothelium of 3 months’ streptozotocin-induced diabetic rats was also reduced in comparison with that in age-matched controls. We conclude that hyperglycaemia and diabetes reduce the molecular and functional expression of TRPV4 channels in retinal microvascular endothelial cells. These changes may contribute to diabetes induced endothelial dysfunction and retinopathy.