N-acetylcysteine (NAC) is a precursor of glutathione (GSH) synthesis, a free radical scavenger and an inhibitor of tumour necrosis factor alpha (TNF). Because these functions might be beneficial in diabetic complications, in this study we examined whether NAC inhibits peripheral neuropathy. Motor nerve conduction velocity (MNCV) was significantly decreased in streptozotocin-induced-diabetic Wistar rats compared to control rats. Oral administration of NAC reduced the decline of MNCV in diabetic rats. Structural analysis of the sural nerve disclosed significant reduction of fibres undergoing myelin wrinkling and inhibition of myelinated fibre atrophy in NAC-treated diabetic rats. NAC treatment had no effect on blood glucose levels or on the nerve glucose, sorbitol and cAMP contents, whereas it corrected the decreased GSH levels in erythrocytes, the increased lipid peroxide levels in plasma and the increased lipopolysaccharide-induced TNF activity in sera of diabetic rats. Thus, NAC inhibited the development of functional and structural abnormalities of the peripheral nerve in streptozotocin-induced diabetic rats.