Schwann cells (SCs), the myelinating cells of the peripheral nervous system, are lost or damaged in patients suffering from diabetic neuropathy. In the current study, 2 model systems are used to study the mechanism of SC damage in diabetic neuropathy: the streptozotocin (STZ)-treated diabetic rat and cultures of purified SCs in vitro. Electron microscopy of dorsal root ganglia from STZ-treated rats reveals classic ultrastructural features of apoptosis in SCs, including chromatin clumping and prominent vacuolation. Bisbenzamide staining of SCs cultured in hyperglycemic defined media shows nuclear blebbing of apoptotic cells. Insulin-like growth factor-I (IGF-I) is protective. LY294002, a phosphatidylinositol 3-kinase (PI 3-kinase) inhibitor, blocks the effect of IGF-I. High glucose induces caspase cleavage in apoptotic SCs--an effect that is blocked by bok-asp-fmk (BAF), a caspase inhibitor. Although Bcl-xL expression remains unchanged in experimental conditions, over-expression of Bcl-xL protects SCs from apoptosis. In summary, hyperglycemia induces caspase activation and morphologic changes in SCs consistent with apoptotic death, both in vivo and in vitro. Over-expression of Bcl-xL, or IGF-I, signaling via PI 3-kinase, protects SCs from glucose-mediated apoptosis in vitro. IGF-I may be useful in preventing hyperglycemia-induced damage to SCs in patients suffering from diabetic neuropathy.