We investigated the effect of treatment with an aldose reductase inhibitor, insulin, or select neurotrophic factors on the generation of oxidative damage in peripheral nerve. Rats were either treated with streptozotocin to induce insulin-deficient diabetes or fed with a diet containing 40% d-galactose to promote hexose metabolism by aldose reductase. Initial time course studies showed that lipid peroxidation and DNA oxidation were significantly elevated in sciatic nerve after 1 week or 2 weeks of streptozotocin-induced diabetes, respectively, and that both remained elevated after 12 weeks of diabetes. The increase in nerve lipid peroxidation was completely prevented or reversed by treatment with the aldose reductase inhibitor, ICI 222155, or by insulin, but not by the neurotrophic factors, prosaptide TX14(A) or neurotrophin-3. The increase in nerve DNA oxidation was significantly prevented by insulin treatment. In contrast, up to 16 weeks of galactose feeding did not alter nerve lipid peroxidation or protein oxidation, despite evidence of ongoing nerve conduction deficits. These observations demonstrate that nerve oxidative damage develops early after the onset of insulin-deficient diabetes and that it is not induced by increased hexose metabolism by aldose reductase per se, but rather is a downstream consequence of flux through this enzyme. Furthermore, the beneficial effect of prosaptide TX14(A) and neurotrophin-3 on nerve function and structure in diabetic rats is not due to amelioration of increased lipid peroxidation.