Increased activation of the first half of the polyol pathway, the conversion of glucose to sorbitol by aldose reductase, has been implicated in aldose reductase inhibitor-preventable neurochemical changes that may contribute to the aetiology of diabetic neuropathy. Tolrestat has been used as a standard aldose reductase inhibitor to dissect out polyol pathway-dependent mechanisms in many experimental studies; however, doubt has been cast upon its ability to prevent nerve conduction velocity deficits in diabetic rats. Nerve dysfunction has also been linked to abnormal endoneurial blood flow and oxygenation via increased vasa nervorum polyol pathway flux. The aim of this study was to test whether tolrestat could correct sciatic conduction velocity and perfusion defects in diabetic rats. Sciatic motor conduction velocity, 21% reduced by 1 month of streptozotocin-induced diabetes, was corrected by 23% and 84% with 1 month of tolrestat treatment at doses of 7 and 35 mg/kg/day respectively. Endoneurial blood flow, 44-52% reduced by untreated diabetes, was within the nondiabetic range with high-dose tolrestat treatment and the flow deficit was 39% corrected by the low dose. Sciatic sorbitol and fructose concentrations were approximately 13-fold and approximately 4-fold elevated by untreated diabetes. This was 32-50% attenuated by low-dose tolrestat and sorbitol and fructose content was suppressed below the nondiabetic level by high dose treatment. A 58% nerve myo-inositol deficit was partially (32%) corrected by high-dose tolrestat treatment. We conclude that tolrestat restores defective conduction and blood flow in diabetic rats and is a good pharmacological tool for studies on polyol pathway effects in peripheral nerve.