A combination of metabolic and vascular defects have been implicated in the pathogenesis of diabetic neuropathy. Animal studies have demonstrated that a reduction in nerve blood flow may be an important early defect and that vasodilators can prevent or ameliorate nerve dysfunction. The potential factors contributing to nerve ischaemia include structural defects in the endoneurial microvasculature together with rheological abnormalities, abnormalities in vasoactive agents which regulate nerve blood flow including nitric oxide and the eicosanoids, and alterations in tone of the autonomic innervation of the nerve vasculature. The principle metabolic defects which have been implicated include disruption of the polyol pathway, altered lipid metabolism, advanced glycosylated end-product formation, increased oxidative stress, and diabetes-induced defects in growth factors. The demonstration that activation of the polyol pathway in experimental diabetes may affect nerve blood flow, and conversely that vasoactive agents appear to be important in regulating some aspects of nerve metabolism, has highlighted the interdependence of the metabolic and vascular defects in the pathogenesis of this condition. Thus, selective intervention aimed at a key defect early in this cascade may subsequently correct a number of later abnormalities offering therapeutic hope in this chronic debilitating complication.