Rats with streptozotocin-induced diabetes exhibit both a reduction in nerve conduction velocity (NCV) and an impaired regenerative response after nerve injury. Nerve blood flow is also reduced in diabetic rats. Vasodilator treatment normalized the deficit in maximum regeneration distance after nerve injury. This strongly suggests a role for endoneurial hypoxia in the impaired regenerative response associated with diabetes. Inhibition of polyol pathway hyperactivity in diabetic rats corrects the deficit in nerve regeneration. Compensation for impaired essential fatty acid metabolism with evening primrose oil treatment had no significant effect on nerve regeneration, but corrected NCV. These findings implicate these two hyperglycemia-related metabolic disturbances in the development of diabetic nerve dysfunction. Levels of oxidative stress are increased in diabetic rats. It was demonstrated that various treatments which act to decrease levels of oxidative stress corrected both the deficit in nerve regeneration and the reduction in NCV found in diabetic rats. It is suggested that an increase in oxidative stress contributes towards nerve dysfunction in diabetes. Feeding non-diabetic rats a 40% galactose diet causes an increase in polyol pathway activity. These animals exhibited similar deficits in nerve regeneration and NCV to those seen in diabetic rats. Anti-oxidant treatment improved both nerve regeneration and NCV in galactose-fed animals. These studies give support to the suggestion that nerve dysfunction due to the diabetes-induced increase in polyol pathway activity involves an increase in levels of oxidative stress. Levels of certain growth factors are reduced in diabetic rats. Treatment of diabetic animals with ciliary neurotrophic factor normalized both nerve regeneration and NCV. Brain-derived neurotropic factor treatment improved nerve regeneration but had no significant effect on NCV.