The endothelial dysfunction and the unbalanced secretion of vasoactive substances are the main causes of the macro and micro vascular complications for patients with diabetic mellitus (DM). This paper investigates the blood flow and the nitric oxide (NO) transport in a permeable capillary by using a finite element method. The computational domain consists of a permeable straight or bifurcated capillary and the surrounding tissue with different endothelial hydraulic permeability. The blood flow in the lumen of a capillary is assumed to be goved by the Stokes equation. The fluid flow in the surrounding tissue is simplified as the Darcy flow. The advection–diffusion reaction equation is employed to investigate the NO distribution in a lumen-tissue model, which is originated from the endothelial cells inside the capillary wall. The characteristic Galerkin method is employed for the discretization of the advection-diffusion reaction equation. The simulated results show that the NO transport is effectively affected by different hydraulic permeabilities due to the changes of the blood velocity. When the hydraulic permeability increases considerably, the NO concentration ([NO]) in the whole domain decreases accordingly. Moreover, the NO concentration increases in the area after the bifurcation of the capillary owing to the convective effect. It is also shown that even if the NO production by the endothelial cells is enhanced, the increase of the convection inside the vessel may reduce the endothelial NO concentration. As a signal transduction molecule, the spatial location with discriminating NO distribution may be useful for determining the position of the microangiopathy in the DM.