To study endoneurial lipid composition in human diabetic neuropathy, we biopsied sural nerves from 3 middleaged men with adult-onset diabetes mellitus. Magnitude of electrophysiological abnormalities and myelinated fiber loss paralleled the clinical severity of neuropathy in all cases. Cholesterol ester concentration was elevated to about 800% of normal in diabetic nerves. Reduction in total endoneurial lipid concentration correlated best with decrease in myelin volume as calculated from measured fiber diameters. Cholesterol, cerebroside, and most phospholipids were reduced in keeping with the severity of fiber loss in each nerve. The phosphatidylinositol-phosphatidylserine fraction was most reduced in the least affected nerves. Cerebroside nonhydroxy fatty acids in diabetic nerves were of shorter chain length and more saturated than normal. It is not yet clear whether the abnormalities of phosphatidylinositol-phosphatidylserine and cerebroside fatty acids are of pathogenetic importance or whether these changes may be the nonspecific consequence of axonal degeneration.