Anoxia and KC1 have been used to inactivate peripheral nerves by depolarization conduction block. Investigation of the inactivation patterns in isolated sciatic nerves of healthy and alloxan-diabetic rats suggests that the paranodal gap substance of healthy nerve behaves as an effective periaxonal diffusion barrier. In diabetic nerve the permeability of this barrier is significantly increased. A marked reduction in the K' binding capacity of the nodal gap substance has been demonstrated in myelinated nerves of human diabetics and alloxan diabetic rats.