Hematologic values are compared for normal and streptozotocin-induced diabetic rats after 6 weeks of induced diabetes. Most hematologic parameters were the same in the two groups except for blood glucose, glycated hemoglobin, and 2,3 diphosphoglycerate, all of which were elevated in the streptozotocin group. However the P50 (the PO2 at which the oxygen-carrying capacity of blood is 50% of maximal) remained normal. We hypothesize that a left shift in the oxyhemoglobin dissociation curve caused by the glycation of a small percentage of the hemoglobin is compensated by elevation in the 2,3-diphosphoglycerate which returns the P50 to normal values. This compensatory mechanism also occurs in some stages of human diabetes.