Leptin production by placental tissues contributes to its circulating levels and functions. The diabetic pathology induces alterations in leptin levels. In the present study, leptin levels were evaluated in placental tissue from control and neonatal streptozotocin-induced (n-STZ) diabetic rats during late gestation. The effects of leptin levels on the generation of nitric oxide (NO), prostaglandin (PG) E(2) production and lipid metabolism were examined. Leptin levels were diminished in placentas from n-STZ diabetic rats compared with controls (P < 0.01). These differences were also evident when leptin was evaluated immunohistochemically. Addition of leptin (1 nM) in vitro enhanced NO production in control (66%) and diabetic placentas (134%) by stimulating NO synthase activity (by 38% and 54%, respectively). The addition of leptin increased PGE(2) production in placentas from control (173%) and diabetic rats (83%) and produced a 50% decrease in placental lipid levels (phospholipids, triacylglycerides, cholesterol and cholesteryl ester) without involving a reduction in de novo lipid synthesis. These data indicate that leptin enhances the production of placental NO and PGE(2), vasoactive agents that modify placental blood flow, and that leptin stimulates placental lipid metabolism, probably generating more lipids for transfer to the fetus. In the diabetic rat, placental leptin was reduced, probably as a response to the maternal environment to locally regulate the transfer of nutrients to the developing fetus.