Painful diabetic neuropathy is poorly controlled by analgesics and requires high doses of opioids, triggering side effects and reducing patient quality of life. This study investigated whether enhanced Rab7-mediated lysosomal targeting of peripheral sensory neuron μ-opioid receptors (MORs) is responsible for diminished opioid responsiveness in rats with streptozotocin-induced diabetes. In diabetic animals, significantly impaired peripheral opioid analgesia was associated with a loss in sensory neuron MOR and a reduction in functional MOR G-protein-coupling. In control animals, MORs were retained mainly on the neuronal cell membrane. In contrast, in diabetic rats, they were colocalized with upregulated Rab7 in LampI-positive perinuclear lysosome compartments. Silencing endogenous Rab7 with intrathecal Rab7-siRNA or, indirectly, by reversing nerve growth factor deprivation in peripheral sensory neurons not only prevented MOR targeting to lysosomes, restoring their plasma membrane density, but also rescued opioid responsiveness toward better pain relief. These findings elucidate in vivo the mechanisms by which enhanced Rab7 lysosomal targeting of MORs leads to a loss in opioid antinociception in diabetic neuropathic pain. This is in contrast to peripheral sensory neuron MOR upregulation and antinociception in inflammatory pain, and provides intriguing evidence that regulation of opioid responsiveness varies as a function of pain pathogenesis.