To examine the effect of blood flow on peripheral nerve function in adults with type 2 diabetes. Ten adults with type 2 diabetes and 10 age- and body mass index-matched controls participated in the study. Soleus H-reflex and motor recruitment curves were determined for subjects at baseline, during 10 minutes of ischemia by femoral artery occlusion, and after a 10-minute bout of leg exercise. At baseline, the H-reflex threshold occurred at 77.44% ± 1.12% and 92.23% ± 0.04% (mean ± SE) of motor threshold at baseline for the diabetes and control groups, respectively. During ischemia, the H-reflex threshold occurred at 72.44% ± 7.19% and 88.79% ± 7.80% of motor threshold at baseline for the diabetic and control groups, respectively. Following exercise, the H-reflex threshold occurred at 64.44% ± 8.47% and 94.93% ± 4.30% of motor threshold at baseline for the diabetes and control groups, respectively, which significantly differed from baseline. Hmax/Mmax ratios were significantly reduced with acute ischemia for the diabetes group (25.6%). Postexercise, the Hmax/Mmax ratio returned to baseline for controls while remaining significantly lower than baseline in the diabetes group. H-reflex and motor responses were hypoexcitable with an accompanying hyperemia for controls. In the diabetes group, the postexercise period resulted in a hyperexcitable H-reflex and motor response. Acute ischemia decreases H-reflex thresholds in adults with diabetes and exercise-induced increases in blood flow further decrease these thresholds. These responses are markedly more pronounced than those of their peers without diabetes and are accompanied by changes in sensory transmission to the motoneuron.