The ability of neurotrophin-3 (NT-3) to reverse established nerve disorders was investigated in the peripheral neuraxis of streptozotocin-diabetic rats. Sciatic sensory and motor nerve conduction velocity deficits established after 2 months of diabetes were completely normalized by one further month of treatment with either NT-3 or insulin. None of these conduction velocity changes were associated with altered mean axonal caliber in the sciatic nerve. In the dorsal and ventral roots, mean axonal caliber was significantly decreased after 8 weeks of diabetes (both P< 0.05). Subsequently, one month of insulin, but not NT-3, treatment increased mean axonal caliber to age-matched control values. NT-3 treatment was also without effect on the significant (both P< 0.05) decrease in phosphorylated heavy neurofilament (NFH) subunits seen in dorsal and ventral roots of 12 week diabetic rats. In the sural nerve, diabetes attenuated a maturation-associated increase in mean axonal caliber over the first 8 weeks of diabetes, and induced atrophy between weeks 8 and 12 that was ameliorated by both NT-3 and insulin treatment. Reductions in sural nerve axonal caliber were associated with a tendency for elevation of both phosphorylated NFH levels in large fibers and the ratio of phosphorylated to nonphosphorylated NFH that was attenuated by NT-3. These data demonstrate that NT-3 corrects established sciatic nerve conduction deficits in diabetic rats in a manner independent of changes in axonal caliber in this nerve. Further, although NT-3 was without effect on decreases in axonal caliber and NFH subunit phosphorylation in the spinal roots, reversal of axonal caliber deficits in peripheral nerves of sensory fibers may involve NT-3-mediated normalization of aberrant neurofilament phosphorylation.