Several studies have suggested that an early increase in renal nitric oxide (NO) production or activity mediates pathophysiologic and morphologic changes in diabetic nephropathy. To evaluate the role of NO in developing diabetic kidney disease, we studied the NO system in streptozotocin (STZ)-induced diabetic rats for a period of 8 weeks. Control rats, STZ-induced diabetic rats, and STZ-induced diabetic rats treated with insulin were monitored and sacrificed at 1, 2, and 8 weeks. Urinary cGMP was measured, and the levels and activity of NO synthase (NOS) isoforms in the kidney cortex were determined at specific times by immunoblotting and diaphorase staining. Diabetic rats had increased kidney weight, urinary volume, glucose, sodium and potassium excretion, which was precluded by insulin treatment. Creatinine clearance was increased in the diabetic group and reversed by insulin treatment. Urinary cGMP decreased by 71, 93, and 92% at 1, 2, and 8 weeks of diabetes, respectively, compared with the control animals. Insulin treatment curtailed the urinary cGMP reduction in diabetic animals. Total NOS activity in the renal cortex was reduced by 65, 52, and 44% after 1, 2, and 8 weeks of diabetes, respectively, and returned to normal levels upon insulin treatment. NADPH diaphorase staining of renal cortical slices showed a 77, 63, and 70% decrease in neuronal NOS isoform activity in the macula densa after 1, 2, and 8 weeks of diabetes, respectively, compared with control non-diabetic animals. This reduction was normalized by insulin treatment. Endothelial NOS protein expression in the kidney cortex tended to increase after 1 week of diabetes and its level was elevated significantly after 2 and 8 weeks of diabetes. However, neuronal NOS protein expression in the kidney cortex was reduced by 52% in 2-week diabetic animals, but this reduction was normalized by insulin treatment. The decreased renal NOS activity during the late phase of diabetes is partially associated with a decrease in neuronal NOS activity and protein expression in kidney macula densa.