Abstract Diabetic nerve reveals a peculiar paradox between its physiological resistance to ischemia, in conducting impulses for longer than control nerve during ischemia, and its morphological liability to more severe pathological changes of nerve fiber when rendered ischemic. These paradoxical phenomena, however, have never been previously evaluated in the same diabetic rat. In the present study, the effect of ischemia on rat diabetic nerve was assessed both physiologically and morphologically at 2 and 16 weeks after the injection of streptozotocin. At 16 weeks the effects of a rapid normalization of blood glucose by insulin on these phenomena were also evaluated. Two weeks after the induction of diabetes, physiological resistance to ischemia was found, but not morphological vulnerability. After 16 weeks of diabetes, both physiological resistance and morphological vulnerability to ischemia were observed. At this time the administration of insulin had no effect on morphological vulnerability, but shortened the time of preservation of nerve action potentials during ischemia although it was not normalized. These findings indicate that the morphological liability of diabetic nerve to ischemia is most likely due to a combined effect of systemic complications of chronic hyperglycemia. By contrast a substantial component of resistance to ischemic conduction failure appears to be related to rapidly reversible metabolic derangement due to hyperglycemia. The study demonstrates coexistence of physiological resistance and morphological vulnerability to ischemia in rat diabetic nerve, and implies that different factors are involved in these paradoxical phenomena.