This investigation examined the effect of treatment of streptozocin-diabetic rats with the aldose reductase inhibitor "Statil" (25 mg/kg/day p.o.) on axonal transport in cholinergic neurons of the sciatic and vagal nerves and on nerve polyol and sugar levels. Three weeks of experimental diabetes caused deficits in the accumulation of choline acetyltransferase activity proximal to 24-h constrictions in the left sciatic and vagus nerves. These deficits did not develop in age-matched, similarly diabetic rats that were treated with the aldose reductase inhibitor. The inhibitor prevented completely the build-up of sorbitol and markedly reduced the build-up of fructose in the sciatic nerves of the treated diabetic rats. The inhibitor also prevented the depletion of myo-inositol that was seen in the untreated diabetic animals. It is suggested that these findings indicate a possible approach to the elucidation of the pathogenesis of cardiac vagal dysfunction in diabetes mellitus.