A reduction in nerve blood flow in chronic experimental diabetes has been linked to impaired conduction. Recently, there have been reports that this is preceded by a period of functional hyperemia. The present investigation explored early changes in sciatic nerve endoneurial blood flow and function in streptozocin-treated rats with durations of diabetes from 1 wk to 4 mo. Blood flow was monitored by microelectrode polarography and hydrogen clearance in thiobutabarbital (Inactin)-anesthetized animals. It was reduced by 41% as early as 1 wk after diabetes induction. There was no evidence of an early functional hyperemia, flow remaining 44% depressed up to 4 mo. In another investigation, similar reductions in blood flow were acutely induced in normal rats rendered hyperglycemic by glucose infusion. In diabetic animals, conduction velocity in sciatic branches supplying gastrocnemius and tibialis anterior muscles was correlated with blood flow. The link was further tested using a group of 2-mo diabetic rats treated with guanethidine. Treatment caused a functional adrenergic sympathectomy, and blood flow increased to within the normal range. Conduction velocity, depressed by 26% with diabetes, was normalized by treatment. These observations support the hypothesis that hyperglycemia-induced blood flow reductions and resultant endoneurial hypoxia are important factors underlying nerve conduction deficits early in the development of diabetic neuropathy.