Decreased blood flow is one of the earliest physiological changes observed after the onset of either clinical or experimental diabetes. The reduction in blood flow is believed to lead to nerve hypoxia, which in conjunction with other metabolic alterations and degenerative processes in different nerve compartments, results in the dysfunction known as diabetic neuropathy. The transcriptional regulator hypoxia-inducible factor-1 alpha (HIF-1α) accumulates rapidly under hypoxic conditions and modulates the expression of several target genes that protect tissues against ischemia and infarction. At present it is unclear whether diabetic nerve injury results from an abnormal response of HIF-1α and its protective target genes. In the present study we have analyzed the expression and activity of HIF-1α and its target genes in diabetic nerves as a first step to determine their possible contribution to the development or maintenance of diabetic neuropathy. We observed a transient increase in the expression of HIF-1α that peaked between 4 and 6 weeks and declined 8 weeks after induction of experimental diabetes in rats. The increase in HIF-1α in diabetic nerves coincided with a similarly transient increase in the expression of several HIF-1α target genes including vascular endothelial growth factor, lactate dehydrogenase and erythropoietin, which subsided 8–10 weeks after induction of diabetes. These results suggest that the transient activation of neurotrophic and angiogenic genes, as opposed to a more sustained effect in response to the chronic injury, may be responsible for the alterations in nerve function and regeneration that characterize the diabetic neuropathy.