Clinical, electrophysiological, and electron microscopical data are presented on 10 diabetic patients with severe progressive neuropathy, predominantly motor in type, in the presence of good blood glucose control, and for one patient with painful neuropathy and third cranial nerve palsy. Endothelial cell hyperplasia was seen in small vessels in all cases, and seven patients showed plugging of the vascular lumen by degenerate cellular material and electron dense protein. It is suggested that these cells desquamate and occlude smaller peripheral vessels at a point of narrowing. In one case the lumen of a vessel was occluded by thrombus. Electron microscopical examination showed a vessel occluded by degranulated platelets. Electrophysiological studies showed a pattern of denervation that was asymmetrical and distally predominant in some patients, suggesting that the neuropathy, at least in part, relates to multiple small infarcts.