The effect of treatment with the aldose reductase inhibitor, Ponalrestat*, was studied in 30 diabetic patients with established peripheral and autonomic neuropathy. After a 4-week placebo run-in phase, patients were randomised to 16 weeks active or placebo treatment in a double-blind, parallel-group trial. Changes in neuropathy were assessed using vibration perception thresholds, heart rate responses to deep breathing, pulse and blood pressure changes on standing and the patients' subjective scoring of peripheral and autonomic neuropathic symptoms. In addition, circulating neuropeptides and the responses of circulating gut peptides to an oral glucose tolerance test were studied. There was a significant improvement in the mean vibration perception threshold over the four sites studied in the ponalrestat treated group. There were no significant changes in the other indices of neuropathy, including heart rate variability, blood pressure responses to standing or symptom scores, though there were trends towards improvement. There were no significant changes in the levels of the circulating neuropeptides or in the responses of the circulating gut peptides to oral glucose tolerance test. No clinically important side-effects attributable to ponalrestat were observed. We conclude that ponalrestat improves some of the parameters of diabetic neuropathy and is likely to be of value in the treatment of this condition.