Vascular alterations of peripheral nerves occuring after mechanical injury or in metabolic disorders are well described. It is thought that vascular endothelial growth factor (VEGF), a potent growth factor for angiogenesis, also plays an important role for regeneration of nervous tissue. We used a rat model of type I diabetes (streptozotozin-induced) with sensory neuropathy and with chronic hyperglycemia over 12 weeks. A monoclonal antibody to VEGF was used for immunohistochemistry of sciatic nerves and dorsal root ganglia (DRG). Intense VEGF staining was detected in cell bodies and nerve fibers of animals with chronic diabetes. Healthy control groups expressed no or very little VEGF and animals treated with insulin to prevent neuropathy and severe hyperglycemia showed significantly lower immunostaining for VEGF. After application of nerve growth factor (NGF), which is known to improve axonal and Schwann cell regeneration, a markedly decreased expression of VEGF was seen in diabetic animals. In contrast, enhanced VEGF staining was noted in NGF-treated healthy controls of the same age and body weight as the diabetic rats. Similar findings were made in diabetic animals treated with both, insulin and NGF. We conclude that functional alteration of peripheral nerves causes up-regulation of VEGF in Schwann cells and neurons. With functional restitution of nervous tissue, i.e. under insulin and/or NGF treatment VEGF expression decreases significantly. Additionally, NGF may stimulate VEGF in normal controls. The production of VEGF may play a role in complete nerve regeneration and its regulation may reflect the functional state of peripheral nerves.