In this study, our aim was to develop a practical strategy to facilitate the management of patients with diabetes mellitus and chronic diarrhea in a tertiary referral practice. We reviewed the pertinent English-language literature of the past 30 years that described the pathophysiologic mechanisms and treatment of patients with diabetic diarrhea and retrospectively reviewed the medical records of all patients with diabetic diarrhea examined at the Mayo Clinic during 1990. Three typical case studies are described to illustrate the diverse mechanisms that lead to chronic diarrhea in patients with diabetes. No report in the literature has systematically evaluated all the putative mechanisms of chronic diarrhea in any group of patients with diabetes. In our tertiary referral practice, diabetic diarrhea was frequently due to celiac sprue, bacterial overgrowth in the small bowel, or fecal incontinence in conjunction with anorectal dysfunction; however, in almost 50% of the patients, these causes were excluded, and abnormal intestinal motility or secretion was postulated to be one of the likely causes of the diarrhea. These data suggest a practical algorithm based on three sequential assessments: first, tests of blood and stool specimens and flexible sigmoidoscopy to detect evidence of malabsorption or disease in the distal colon; second, small bowel aspirate and biopsy if the results of initial blood or stool tests are abnormal or anorectal function tests if those test results are normal; and, finally, measurement of gastrointestinal transit or therapeutic trials with opioids, clonidine hydrochloride, and, rarely, cholestyramine resin or octreotide acetate (or both methods). The mechanisms whereby abnormal neural function due to diabetes results in altered digestive, secretory, absorptive, or motor function necessitate further elucidation. The management of chronic diarrhea in patients in a tertiary referral practice, however, can be based on a practical algorithm to determine the cause and to adopt specific treatment to correct it.