A polyol-pathway-related mechanism has been invoked in the pathogenesis of murine and human diabetic peripheral neuropathy in which progressive axonal atrophy and axo-glial dysjunction constitute the cardinal structural abnormalities. We have previously reported similar neuroanatomical changes in the optic nerve of 6-month diabetic BB/W-rats. In the present study we demonstrate progression of axonal atrophy and axo-glial dysjunction in the optic nerve in 12-month diabetic BB/W-rats. These structural lesions showed highly significant correlations with the associated prolongation of the latencies of the visual evoked potentials, suggesting that axo-glial dysjunction and axonal atrophy are major determinants for impaired optic nerve function. As in peripheral nerve, the polyol-pathway is present in the optic nerve and is activated by hyperglycaemia and galactosaemia. In this study we further examined the treatment effect of the aldose reductase inhibitor ponalrestat, given from 3 weeks of diabetes and continued throughout the study protocol. This regimen resulted in complete prevention of axo-glial dysjunction, and had a significant ameliorating effect on visual evoked potential latencies, but had no effect on optic nerve axonal atrophy. This latter finding differs from the effect of aldose reductase inhibition on diabetic peripheral nerve and suggests that axonal atrophy of central nerve tracts in diabetes may be the consequence of other metabolic abnormalities or alternatively the present regimen was insufficient to protect central axons from the effects of an increased activity of the polyol pathway.