We have previously shown depletion of nerves and neuropeptides in skin biopsies of diabetic patients, even in the absence of clinical signs and symptoms of sensory and autonomic neuropathy, but were unable to examine the changes occurring at an early stage of the disease. Therefore, the distribution and relative density of peptide-containing nerves was studied in streptozotocin-treated rats in order to assess the progression of neural changes in the initial stages of diabetes. Skin samples dissected from the lip and footpad of diabetic rats, 2, 4, 8 and 12 weeks after streptozotocin injection and age matched controls were sectioned and were immunostained with antisera to the neuropeptides substance P, calcitonin gene-related peptide (CGRP), vasoactive intestinal polypeptide (VIP) and neuropeptide Y (NPY), and to a general neural marker, protein gene product 9.5 (PGP 9.5). No change was apparent in the distribution or relative density of immunoreactive cutaneous nerve fibres 2, 4 and 8 weeks after streptozotocin treatment. By 12 weeks there was a marked increase in the number of CGRP-immunoreactive fibres present in epidermis and dermis, and of VIP-immunoreactive fibres around sweat glands and blood vessels. A parallel increase was seen in nerves displaying PGP 9.5 immunoreactivity. No differences were detected in nerves immunoreactive for either substance P in the epidermis and dermis, and NPY around blood vessels. The alterations in the peptide immunoreactivities may be similar in the initial stages of human diabetes.