Altered neurotrophism in diabetic peripheral neuropathy (DPN) is associated in part with substantial degenerative changes in Schwann cells (SCs) and an increased expression of the p75 neurotrophin receptor (p75NTR). Caveolin-1 (Cav-1) is highly expressed in adult SCs, and changes in its expression can regulate signaling through Erb B2, a co-receptor that mediates the effects of neuregulins in promoting SC growth and differentiation. We examined the hypothesis that hyperglycemia-induced changes in Cav-1 expression and p75NTR signaling may contribute to altered neurotrophism in DPN by modulating SC responses to neuregulins. In an animal model of type 1 diabetes, hyperglycemia induced a progressive decrease of Cav-1 in SCs of sciatic nerve that was reversed by insulin therapy. Treatment of primary neonatal SCs with 20-30 mm d-glucose, but not l-glucose, was sufficient to inhibit transcription from the Cav-1 promoter and decrease Cav-1 mRNA and protein expression. Hyperglycemia prolonged the kinetics of Erb B2 phosphorylation and significantly enhanced the mitogenic response of SCs to neuregulin1-beta1, and this effect was mimicked by the forced down-regulation of Cav-1. Intriguingly, nerve growth factor antagonized the enhanced mitogenic response of SCs to neuregulin1-beta1 and inhibited the glucose-induced down-regulation of Cav-1 transcription, mRNA, and protein expression through p75NTR-dependent activation of JNK. Our data suggest that Cav-1 down-regulation may contribute to altered neurotrophism in DPN by enhancing the response of SCs to neuregulins and that p75NTR-mediated JNK activation may provide a mechanism for the neurotrophic modulation of hyperglycemic stress.