The possibility has been raised that Folium mori is clinically effective for the treatment and prevention of diabetes. In the present study, the effects of Folium mori on cell proliferation and expression of neuropeptide Y (NPY) in the dentate gyrus of rats with streptozotocin (STZ)-induced diabetes were investigated by 5-bromo-2'-deoxyuridine (BrdU) immunohistochemistry and NPY immunohistochemistry. In rats with STZ-induced diabetes, cell proliferation and NPY expression in the dentate gyrus were suppressed, and treatment with Folium mori was shown to increase new cell formation and NPY expression in the dentate gyrus in both normal rats and those with STZ-induced diabetes. In light of previous studies, this result appears to indicate that increased expression of NPY in the dentate gyrus induced by treatment with Folium mori is associated with the observed effect of Folium mori extract on cell proliferation. Based on the present results, it is suggested that Folium mori treatment may aid in the recovery from the central nervous system complications of diabetes mellitus.