Resistance to ischaemic conduction failure is a recognised but unexplained property of diabetic peripheral nerve. We have studied matched groups of control, diabetic, and non-diabetic hypoxic subjects (hypoxia: arterial oxygen tension less than or equal to 60 mm Hg (8 kPa) on at least one occasion and secondary to chronic lung disease). Similar resistance to ischaemia was seen in the hypoxic and diabetic groups compared with control subjects (p less than 0.001). The degree of resistance correlated with arterial oxygen tension at the time of testing (r = 0.72, p less than 0.01). In all individuals with acute exacerbations of hypoxia, the resistance to ischaemia was normalised with improvement of respiratory function (p less than 0.02). These results are compatible with the hypothesis that endoneurial hypoxia may be a factor in the pathogenesis of diabetic neuropathy.