The pathogenetic basis for diabetic neuropathy has been enigmatic. Using two different animal models of diabetes, we have investigated the hypothesis that experimental diabetic neuropathy results from destruction of the vasa nervorum and can be reversed by administration of an angiogenic growth factor. Nerve blood flow, as measured by laser Doppler imaging or direct detection of a locally administered fluorescent lectin analogue, was markedly attenuated in rats with streptozotocin-induced diabetes, consistent with a profound reduction in the number of vessels observed. A severe peripheral neuropathy developed in parallel, characterized by significant slowing of motor and sensory nerve conduction velocities, compared with nondiabetic control animals. In contrast, 4 weeks after intramuscular gene transfer of plasmid DNA encoding VEGF-1 or VEGF-2, vascularity and blood flow in the nerves of treated animals were similar to those of nondiabetic control rats; constitutive overexpression of both transgenes resulted in restoration of large and small fiber peripheral nerve function. Similar experiments performed in a rabbit model of alloxan-induced diabetes produced comparable results. These findings support the notion that diabetic neuropathy results from microvascular ischemia involving the vasa nervorum and suggest the feasibility of a novel treatment strategy for patients in whom peripheral neuropathy constitutes a secondary complication of diabetes.