Sensory neurons from streptozotocin (STZ)-diabetic rats exhibit depolarization of mitochondria and the related induction of reactive oxygen species has been proposed to contribute to the etiology of sensory polyneuropathy in diabetes. There is deficient neurotrophin-3 (NT-3)-dependent neurotrophic support of sensory neurons in diabetes and treatment of STZ-diabetic rats with NT-3 prevents neuropathological alterations in peripheral nerve. Therefore, we hypothesized that loss of NT-3 may contribute to mitochondrial dysfunction in sensory neurons in diabetic sensory neuropathy. The specific aim of this study was to determine whether treatment of STZ-diabetic rats with systemic NT-3 could prevent depolarization of the mitochondrial inner membrane potential (Δψ_m). In vitro studies with cultured DRG neurons from control rats revealed that treatment with 50 ng/ml NT-3 for 6 h enhanced the Δψ_m, e.g., a higher polarized membrane potential, compared to untreated neurons (P < 0.05). Studies on DRG sensory neurons from control vs. STZ-diabetic rats demonstrated that NT-3 therapy prevented the diabetes-induced depolarization of Δψ_m (P < 0.05) in parallel with normalization of diabetes-dependent deficits in sensory nerve conduction velocity. Furthermore, alterations in mitochondrial function in vitro and in vivo correlated with the level of activation/expression of Akt in DRG neurons.