Loss of neurogenic inflammation in response to tissue injury may be an important complication of diabetes mellitus. We studied local neurogenic inflammation in the peripheral nerve trunk of Sprague-Dawley rats 4 months following the induction of diabetes by streptozotocin injection. To assess neurogenic inflammation, the epineurial plexus of the sciatic nerve was exposed to topical capsaicin, an agent that releases vasoactive neuropeptides from perivascular afferent terminals. Under normal circumstances, local vasodilation results in endoneurial hyperaemia or a 'flare'. We evaluated the influence of capsaicin in diabetic sciatic nerve by making serial measurements of endoneurial blood flow using microelectrodes sensitive to hydrogen clearance. After 4 months of hyperglycaemia (glucose > 16.0 mmol/l), diabetic animals had slowing of unmyelinated and myelinated sural sensory conduction velocity compared to citrate buffer injected controls. Baseline sciatic endoneurial blood flow was unaltered by diabetes, and was comparable to controls. There was an expected hyperaemic response of endoneurial blood flow to capsaicin in control rat sciatic endoneurium but no consistent 'flare' response in diabetic rats. Our findings indicate that there is loss of capsaicin-related neurogenic inflammation in the vasa nervorum of experimental diabetes. It is possible that a similar deficit following nerve injury could impair the milieu for axonal regeneration in diabetes.