Median nerve function was studied in twelve diabetic subjects, six subjects with chronic hypoxaemia and ten control subjects. Resistance to ischaemic conduction failure (RICF), a characteristic electrophysiological feature of diabetic neuropathy, was assessed by measuring the decline in median nerve action potential amplitude at minute intervals for up to 20 minutes while the arm was rendered ischaemic. Initial nerve conduction velocity and action potential amplitude was similar in all three groups. Following the onset of ischaemia the time to a 50% reduction in action potential amplitude was prolonged in both diabetic subjects and hypoxaemic subjects compared with controls. After 20 minutes of ischaemia no control subject had persisting nerve function, while function remained in 5 (80%) of hypoxaemic subjects and 10 (83%) of diabetic subjects. The time to a 50% reduction in action potential amplitude during ischaemia correlated with the blood oxygen saturation among the hypoxic subjects and haemoglobin Alc among diabetic subjects. These results are consistent with the hypothesis that hypoxia has a role in the pathogenesis of resistance to ischaemic conduction failure in diabetes.