Peripheral neuropathy is a common and major complication of diabetes, the underlying mechanisms of which are not fully understood. Using a mouse model of type II diabetes, the present study investigated the role of phosphodiesterase-5 (PDE5) in peripheral neuropathy. BKS.Cg-m+/+Leprdb/J (db/db) mice were treated with sildenafil, a specific inhibitor of PDE5, at doses of 2 and 10 mg/kg or saline. Levels of PDE5 and morphometric parameters in sciatic nerve tissue as well as the motor and sensory function were measured in these mice. In diabetic mice, PDE5 expression in sciatic nerve tissue was significantly upregulated, whereas the myelin sheath thickness, myelin basic protein (MBP), and subcutaneous nerve fibers were significantly reduced. Treatment with sildenafil significantly improved neurological function, assayed by motor and sensory conducting velocities and thermal and mechanical noxious stimuli, concomitantly with increases in myelin sheath thickness, MBP levels, and subcutaneous nerve fibers. In vitro, hyperglycemia upregulated PDE5 in Schwann cells and reduced Schwann cell proliferation, migration, and expression of brain-derived neurotrophic factor (BDNF). Blockage of PDE5 with sildenafil increased cyclic guanosine monophosphate (cGMP) and completely abolished the effect of hyperglycemia on Schwann cells. Sildenafil upregulated cGMP-dependent protein kinase G I (PKGI), whereas inhibition of PKGI with a PKG inhibitor, KT5823, suppressed the inhibitory effect of sildenafil on Schwann cells. These data indicate that hyperglycemia substantially upregulates PDE5 expression and that the cGMP/PKG signaling pathway activated by sildenafil mediates the beneficial effects of sildenafil on diabetic peripheral neuropathy.