Four months of galactose intoxication induces a dose-dependent osmotic imbalance of the nerve microenvironment characterized by polyol, water, and electrolyte accumulation. Recently, dose-dependent cellular lesions have been described in the sciatic nerves of galactose-intoxicated rats. The present study was designed to demonstrate that the cell injury and endoneurial osmotic imbalance in galactose intoxication are dependent on the subsequent metabolism of galactose by the polyol pathway. Three groups of age-matched, female Sprague-Dawley rats were fed a control diet or diets containing complete micronutrient supplements with 40% galactose or 40% galactose and 0.04% Ponalrestat, an aldose reductase inhibitor (ARI). After 4 to 5 months, sciatic nerves were analyzed for polyol, water and endoneurial electrolyte content and processed for light and electron microscopic examination. Ponalrestat prevented myo-inositol depletion and accumulations of dulcitol, water and endoneurial fluid electrolytes. Axonal size-frequency histograms revealed that Ponalrestat attenuated the shift toward smaller fibers and the decrease in mean axonal diameter seen in untreated galactose-fed rats. Electron microscopic examination showed widespread reactive and degenerative changes in Schwann cells of galactose-intoxicated rats that culminated in cytoplasmic disintegration. Quantitative electron microscopy revealed that ARI treatment significantly reduced the incidence of abnormal Schwann cells. These observations indicate that the osmotic imbalance and cell injury seen in galactose intoxication are dependent on the metabolism of galactose by the polyol pathway.