To further understand the role of aldose reductase (AR) in the etiology of diabetic neuropathy, we generated transgenic mice that overexpress AR specifically in the Schwann cells under the control of the rat myelin protein zero (P0) promoter. One of the transgenic mouse lines, which has overexpression of AR mRNA in the Schwann cell only and higher AR activity in the sciatic nerve, was used to examine the relationship between increased AR activity and motor nerve conduction velocity (MNCV) deficit under diabetic and galactosemic conditions. Under these conditions, nontransgenic mice showed a slight reduction in MNCV compared to those of controls. However, transgenic mice exhibited a significantly greater reduction in MNCV under these conditions, particularly under galactosemic condition, indicating that a Schwann cell-specific increase in aldose reductase activity is sufficient to produce the phenotype. Interestingly, under galactosemic condition where the difference in MNCV deficit between transgenic and nontransgenic mice was most pronounced, there was no significant difference in accumulated galactitol levels in the sciatic nerve between these mice. These results indicate that increase in AR activity leads to greater reduction of MNCV under galactosemic and diabetic conditions, but galactitol and sorbitol levels may not be good indicators of the severity of neuropathy. On the other hand, the level of reduced glutathione (GSH) in the sciatic nerve was found to be correlated with the severity of MNCV deficit under the diabetic condition. Diabetic AR transgenic mice showed significant reduction of GSH in their sciatic nerve, whereas the diabetic nontransgenic mice showed no reduction in GSH level compared to the nondiabetic control, suggesting that AR is a key contributor to oxidative stress under diabetic condition.