Accumulating evidence suggest that diabetic retinopathy (DR) is a chronic inflammatory disorder. In the prior grant period, we have successfully established that aberrant activation of the canonical Wnt pathway in the retina plays a key pathogenic role in retinal inflammation and neovascularization (NV) in DR. This project represents a logical extension of our previous studies and aims to elucidate the mechanism responsible for the Wnt pathway over-activation in DR. Peroxisome proliferator-activated receptor- (PPAR) is a hormone-activated receptor and transcription factor. Two independent clinical studies reported surprise findings that oral administration of fenofibrate, a small molecule PPAR agonist, confers robust therapeutic effects on DR in type 2 diabetic patients. However, the mechanism for this beneficial effect on DR has not been elucidated, and the function of PPAR in the retina is unknown. Recently, we have the following finding implicating PPAR in DR: 1) PPAR is expressed in the retina. 2) PPAR expression is down-regulated in the retinas of both type 1 and type 2 diabetic models. 3) Fenofibrate ameliorates retinal inflammation and vascular leakage in DR models. 4) Fenofibrate inhibits Wnt signaling and down-regulates Wnt target genes induced by diabetes and by Wnt ligands. 5) Over-expression of PPAR alone suppressed Wnt signaling. 6) PPAR knockout (KO) abolishes the effects of fenofibrate on diabetes-induced retinal vascular leakage. Based on these results, we hypothesize that PPAR inhibits Wnt signaling and inflammation in the retina, and that the decreased PPAR expression in the diabetic retina plays an important pathogenic role in DR. To test this hypothesis, we propose the following studies: 1) We will first establish the role of diabetes-induced down-regulation of PPAR in retinal inflammation and vascular leakage in DR. We will induce diabetes in PPAR-/- mice and determine if PPAR KO exacerbates DR. Diabetic PPAR-/- mice will be treated with fenofibrate to determine if lack of PPAR abolishes the therapeutic effect of fenofibrate on DR. We will also determine if over-expression of PPAR in the retina of diabetic rats ameliorates DR. 2) We will test the hypothesis that decreased PPAR expression in diabetic retina is responsible for the aberrant activation of Wnt signaling in the retina. Specifically, we will investigate if PPAR KO exacerbates the diabetes-induced Wnt pathway activation in the retina. We will also elucidate the mechanism by which PPAR down-regulates the Wnt pathway. 3) We will define the mechanism responsible for diabetes-induced down- regulation of PPAR in the retina. These studies will define novel interactions between PPAR and Wnt signaling, establish a novel pathogenic mechanism for retinal inflammation in DR and identify an endogenous regulator of Wnt signaling. These studies will also elucidate the mechanism for the fenofibrate's effects on DR and identify a new drug target for the treatment.