During the past decade, our appreciation of the original experiments with myo-inositol supplementation in diabetic rats has greatly expanded. The effects of myo-inositol on nerve conduction are now explained by concepts that were largely unappreciated in 1976, including the fundamental role of phosphoinositide metabolism in cell regulation and the importance of the activity of sodium-potassium-ATPase in nerve conduction. Aldose reductase inhibitors firmly link defects in myo-inositol metabolism to activation of the polyol pathway in diabetes; the resulting "sorbitol-myo-inositol hypothesis" has been extended from its application to the lenses and peripheral nerves to most of the tissues involved with diabetic complications. These biochemical mechanisms provide a new framework within which to explore the complex interactions between hyperglycemia and the vascular, genetic, and environmental variables in the pathogenesis of diabetic complications. It is anticipated that these endeavors will result in the appearance of new classes of therapeutic agents, the first of which--the aldose reductase inhibitors--has emerged from the laboratory and is now undergoing extensive clinical testing. These efforts are very likely to result in the appearance of new treatment methods that may dramatically lighten the burden of chronic complications in patients with diabetes.