Metabolic and vascular factors have been invoked in the pathogenesis of diabetic neuropathy but their interrelationships are poorly understood. Both aldose reductase inhibitors and vasodilators improve nerve conduction velocity, blood flow, and (Na+,K+)-ATPase activity in the streptozotocin diabetic rat, implying a metabolic-vascular interaction. NADPH is an obligate cofactor for both aldose reductase and nitric oxide synthase such that activation of aldose reductase by hyperglycemia could limit nitric oxide synthesis by cofactor competition, producing vasoconstriction, ischemia, and slowing of nerve conduction. In accordance with this construct, N-nitro-L-arginine methyl ester, a competitive inhibitor of nitric oxide synthase reversed the increased nerve conduction velocity afforded by aldose reductase inhibitor treatment in the acutely diabetic rat without affecting the attendant correction of nerve sorbitol and myo-inositol. With prolonged administration, N-nitro-L-arginine methyl ester fully reproduced the nerve conduction slowing and (Na+,K+)-ATPase impairment characteristic of diabetes. Thus the aldose reductase-inhibitor-sensitive component of conduction slowing and the reduced (Na+,K+)-ATPase activity in the diabetic rat may reflect in part impaired nitric oxide activity, thus comprising a dual metabolic-ischemic pathogenesis.