Morphometric techniques were employed to assess perineurial capillary abnormalities in the sural nerve of 20 diabetic patients with neuropathy and 10 normal control subjects. Structural abnormalities were related to quantitative neurophysiological and neuropathological measures of neuropathy. Perineurial capillary endothelial cell area (P < 0.001) and endothelial cell profile number (P < 0.01) were increased and luminal area (P < 0.001) was reduced in diabetic patients when compared with control subjects. A significant relationship was observed between endothelial cell hyperplasia and measures of neuropathic severity. These findings provide evidence for perineurial capillary luminal occlusion due primarily to both endothelial cell hypertrophy and hyperplasia. Such a reduction in luminal size is expected to reduce transperineurial and hence endoneurial blood flow, resulting in endoneurial hypoxia and hence human diabetic neuropathy.