Increasing the expression of Hsp70 (heat-shock protein 70) can inhibit sensory neuron degeneration after axotomy. Since the onset of DPN (diabetic peripheral neuropathy) is associated with the gradual decline of sensory neuron function, we evaluated whether increasing Hsp70 was sufficient to improve several indices of neuronal function. Hsp90 is the master regulator of the heat-shock response and its inhibition can up-regulate Hsp70. KU-32 (N-{7-[(2R,3R,4S,5R)-3,4-dihydroxy-5-methoxy-6,6-dimethyl-tetrahydro-2H-pyran-2-yloxy]-8-methyl-2-oxo-2H-chromen-3-yl}acetamide) was developed as a novel, novobiocin-based, C-terminal inhibitor of Hsp90 whose ability to increase Hsp70 expression is linked to the presence of an acetamide substitution of the prenylated benzamide moiety of novobiocin. KU-32 protected against glucose-induced death of embryonic DRG (dorsal root ganglia) neurons cultured for 3 days in vitro. Similarly, KU-32 significantly decreased neuregulin 1-induced degeneration of myelinated Schwann cell DRG neuron co-cultures prepared from WT (wild-type) mice. This protection was lost if the co-cultures were prepared from Hsp70.1 and Hsp70.3 KO (knockout) mice. KU-32 is readily bioavailable and was administered once a week for 6 weeks at a dose of 20 mg/kg to WT and Hsp70 KO mice that had been rendered diabetic with streptozotocin for 12 weeks. After 12 weeks of diabetes, both WT and Hsp70 KO mice developed deficits in NCV (nerve conduction velocity) and a sensory hypoalgesia. Although KU-32 did not improve glucose levels, HbA1c (glycated haemoglobin) or insulin levels, it reversed the NCV and sensory deficits in WT but not Hsp70 KO mice. These studies provide the first evidence that targeting molecular chaperones reverses the sensory hypoalgesia associated with DPN.