In diabetes, increased oxidative stress, disruption of signal transduction pathways, and endothelial dysfunction have been critically implicated in the pathogenesis of experimental diabetic neuropathy (EDN). The development of nerve conduction slowing in diabetes is accompanied by depletion of the beta-amino acid taurine. Since taurine functions as an antioxidant, calcium modulator, and vasodilator, taurine depletion may provide a pathogenetic link between nerve metabolic, vascular, and functional deficits complicating diabetes. The mechanism(s) of nerve taurine depletion, the localization of critical taurine deficits, and its pathophysiological significance in EDN are however unknown. This study explored the pathophysiological effects of selective nerve taurine replacement in streptozotocin-diabetic (STZ-D) rats. A polyclonal human taurine transporter (TT) antibody was also generated in order to determine potential loci of critical taurine depletion. Two weeks of STZ-D reduced sciatic motor nerve conduction velocity (NCV) by 23% (P < 0.01), decreased composite nerve blood flow by 38% (P < 0.01), and reduced nerve taurine content by 29% (P < 0.05). In STZ-D rats, a 1% taurine diet corrected nerve taurine depletion, prevented motor NCV slowing, and partially attenuated composite nerve blood flow deficits. After 6 weeks of STZ-D, a 1% taurine diet ameliorated motor NCV slowing and endoneurial nutritive blood flow deficits, prevented digital sensory NCV slowing, and reduced ouabain-sensitive nerve (Na,K)-ATPase activity. Immunohistochemical studies localized taurine and the TT to the vascular endothelium and Schwann cells of the sciatic nerve. In conclusion, taurine depletion in the vascular endothelium and Schwann cells of the sciatic nerve may contribute to the neurovascular and metabolic deficits in EDN.