Mitochondrial dysfunction has been proposed as a mediator of neurodegeneration in diabetes complications. The aim of this study was to determine whether deficits in insulin-dependent neurotrophic support contributed to depolarization of the mitochondrial membrane in sensory neurons of streptozocin (STZ)-induced diabetic rats. Whole cell fluorescent video imaging using rhodamine 123 (R123) was used to monitor mitochondrial inner membrane potential (Δψm). Treatment of cultured dorsal root ganglia (DRG) sensory neurons from normal adult rats for up to 1 day with 50 mmol/l glucose had no effect; however, 1.0 nmol/l insulin increased Δψm by 100% (P < 0.05). To determine the role of insulin in vivo, STZ-induced diabetic animals were treated with background insulin and the Δψm of DRG sensory neurons was analyzed. Insulin therapy in STZ-induced diabetic rats had no effect on raised glycated hemoglobin or sciatic nerve polyol levels, confirming that hyperglycemia was unaffected. However, insulin treatment significantly normalized diabetes-induced deficits in sensory and motor nerve conduction velocity (P < 0.05). In acutely isolated DRG sensory neurons from insulin-treated STZ animals, the diabetes-related depolarization of the Δψm was corrected (P < 0.05). The results demonstrate that loss of insulin-dependent neurotrophic support may contribute to mitochondrial membrane depolarization in sensory neurons in diabetic neuropathy.