We investigated whether progressive sensory neuropathy was accompanied by changes in whole-body insulin sensitivity (WBIS) in rats made diabetic by streptozotocin (STZ). The effects of early and late insulin supplementation were also studied. The STZ-treated rats failed to gain weight and exhibited stable hyperglycemia and low plasma insulin levels with a decrease in nerve conduction velocity (NCV) measured in A and C fibers of the saphenous nerve. A decreased sensory neuropeptide (SNP) release such as that of substance P, somatostatin, and calcitonin gene–related peptide determined from organ fluid of tracheal preparations subjected to electrical field stimulation also occurred in diabetic animals. These features were accompanied by a decrease in WBIS measured by hyperinsulinemic-euglycemic glucose clamping and a decrease in insulin-stimulated glucose uptake in cardiac and gastrocnemius muscle. When insulin supplementation with slow-release implants (2 IU/d) was started 4 weeks after STZ injection, blood glucose level normalized. Both insulin sensitivity and sensory nerve function reflected in either NCV or SNP release completely recovered by the 12th post-STZ week. When the insulin implants were applied from the eighth post-STZ week, both WBIS and glucose uptake remained significantly decreased, with a seriously impaired NCV and SNP release with strong hyperglycemia. Late insulin supplementation, however, even by using double implantation from the 10th post-STZ week, was unable to restore blood glucose, WBIS, NCV, and SNP release by the 12th week. Insulin resistance occurs in parallel with sensory neuropathy in STZ-diabetic rats. Both can be improved by early but not late insulin supplementation.