The effect of a newly developed oral agent, prostaglandin E1 (PGE1) analogue TFC 612, on diabetic neuropathy was studied by giving it for 6 wk to streptozocin-induced diabetic rats that had been diabetic for 3 mo and was compared with the effects of aldose reductase inhibitor ONO 2235. Although both compounds improved decreased motor nerve conduction velocity, the effect of TFC 612 continued during the 6 wk of treatment, whereas that of ONO 2235 became weaker from wk 4. The abnormality in sciatic nerve sorbitol and myo-inositol levels was reversed with ONO 2235, whereas it was unchanged with TFC 612. With the laser Doppler flowmetry technique, a decrease in the sciatic nerve blood flow in diabetic rats was shown to improve with both compounds, but TFC 612 had a greater effect than ONO 2235, and the increased lactate level of the diabetic nerve was corrected with both compounds, suggesting that both may be associated with the amelioration of ischemia in the diabetic endoneurium. Both TFC 612 and ONO 2235 partially but significantly normalized decreased fiber size in diabetic rats. On the other hand, TFC 612 completely normalized the dilated lumen area in diabetic rats, whereas ONO 2235 did not. These results suggest that the PGE1 analogue TFC 612 has a significant effect on diabetic neuropathy, possibly via vasotropic action, and may be a potent compound for the treatment of diabetic neuropathy.