An injection of streptozocin (STZ) was used to study diabetes-induced peripheral neuropathy in rats. In such rats the values of motor nerve conduction velocity and sensory nerve conduction velocity were decreased compared with the values obtained in nondiabetic controls from 3 wk after STZ injection onward. In recent years it has been extensively documented that peptides related to ACTH and MSH exert a neurotrophic effect on the nervous system that results in enhanced recovery of function after mechanical nerve damage. This article documents the beneficial effect of the peptide Org 2766, an ACTH-(4-9) analogue, in diabetic peripheral neuropathy. Chronic subcutaneous treatment of diabetic rats with Org 2766 results in a significant enhancement of both motor and sensory nerve conduction velocity compared with saline-treated diabetic rats. Histological analysis of cross sections of the sural nerve showed no difference in the total number of nerve fibers in saline- or peptide-treated diabetic rats. In contrast, a difference in fiber size distribution was demonstrated; i.e., the sural nerves of diabetic rats contained fewer thick myelinated fibers. Treatment with Org 2766 resulted in a normal distribution. Apparently, the peptide Org 2766 has a protective action on nerve fibers and nerve function during STZ-induced diabetes.