1. Release of acetylcholine from parasympathetic nerves is inhibited by neuronal M(2) muscarinic receptors. The effects of streptozotocin-induced diabetes on prejunctional M(2) and postjunctional M(3) muscarinic receptor function in rat trachea and ileum were investigated in vitro. 2. Neuronal M(2) muscarinic receptor function was tested by measuring the ability of an agonist, pilocarpine, to inhibit and an antagonist, methoctramine, to potentiate electrical field stimulation (EFS)-induced contraction of trachea and ileum. Concentration-response curves to pilocarpine and methoctramine were shifted to the left in both to a greater degree in diabetics than controls. 3. In trachea, post-junctional M(3) muscarinic receptor function was increased since maximum contractile responses to the muscarinic agonists acetylcholine and carbachol were greater in diabetics than controls. This increase offset the increased function of the inhibitory neuronal M(2) muscarinic receptors since EFS-induced, frequency-dependent contraction was equal in control and diabetic rats. 4. In contrast, post-junctional M(3) muscarinic receptor function was unchanged by diabetes since concentration-response curves to acetylcholine and carbachol were not different between groups. Thus, EFS-induced contractions of the ileum were decreased in diabetics versus controls. 5. In conclusion, inhibitory M(2) muscarinic receptors on parasympathetic nerves in the trachea and ileum are hyperfunctional in diabetic rats. The function of post-junctional M(3) muscarinic receptors in the trachea, but not the ileum, is also increased in diabetes. 6. The dysfunction of inhibitory, neuronal M(2) muscarinic receptors in the airways may protect against hyperreactivity and in the ileum may contribute to gastrointestinal dysmotility associated with diabetes.