Morphological findings in sural nerves were related to nerve conduction in 12 patients with diabetic neuropathy, five with mainly sensory involvement, four with severe, symmetrical sensory-motor polyneuropathy, and three with multiple mononeuropathy. All had loss of large and small myelinated and of unmyelinated fibres, even early in the disease; segmental remyelination was the most prominent myelin alteration in teased fibres, segmental demyelination was found in only a few fibres. Axonal degeneration and Schwann cell damage seem to proceed independently of each other. The relation between recorded conduction velocity and that expected from the diameter of the largest fibres indicated that slowing of 20 to 30% was due to causes other than fibre loss; a grossly diminished conduction velocity was caused mainly by fibre loss. Electrophysiological findings in the sural nerve were largely representative of findings in other nerves, though abnormalities were less marked in the median nerve. In half the endoneurial vessels from diabetic neuropathy the perivascular space was thickened or contained more layers of basal laminae than normal. The same abnormalities were found in one-quarter of the endoneurial vessels from other acquired neuropathies.