Background: There is impaired neurotrophic growth factor signaling, AMP-activated protein kinase (AMPK) activity and mitochondrial function in dorsal root ganglia (DRG) of animal models of type 1 and type 2 diabetes exhibiting diabetic sensorimotor polyneuropathy (DSPN). We hypothesized that loss of direct insulin or insulin-like growth factor 1 (IGF-1) signaling in diabetes drives depression of AMPK activity and mitochondrial function, both contributing to development of DSPN. Methods: Age-matched control Sprague-Dawley rats and streptozotocin (STZ)-induced type 1 diabetic rats with/without IGF-1 therapy or insulin implants were used for in vivo studies. For in vitro studies, adult DRG neurons derived from control or STZ-diabetic rats were cultured under defined conditions and treated with/without IGF-1 or insulin. Activators or inhibitors targeting components of the insulin/IGF-1 signaling pathways were used to unravel the mechanism of insulin/IGF-1 action in DRG neurons. Results: Insulin increased Akt phosphorylation and neurite outgrowth, and augmented mitochondrial function in DRG cultures derived from control or type 1 diabetic rats. In STZ-diabetic rats insulin implants reversed thermal sensitivity, increased dermal nerve density and restored the expression/activity of respiratory chain proteins in DRG. Decreased expression of mRNAs for IGF-1, AMPKα2 and ATP5a1 (subunit of ATPase) occurred in DRG of diabetic vs. control rats. IGF-1 up-regulated mRNA levels of these genes in cultured DRG neurons from control or diabetic rats. IGF-1 elevation of mitochondrial function, mtDNA and neurite outgrowth was suppressed by inhibition of AMPK (via siRNA). IGF-1 therapy in diabetic rats reversed thermal hypoalgesia, raised corneal nerve density and prevented tricarboxylic acid (TCA) pathway metabolite build-up in the sciatic nerve. Endogenous IGF-1 gene expression in neurons of the DRG was suppressed by hyperglycemia and rescued by treatment with IGF-1 or the aldose reductase inhibitor, sorbinil. Transcription factors NFAT1 and CEBP-β bound to the IGF-1 promoter in DRG tissue at higher levels in control vs diabetic rats. Inhibition of endogenous IGF-1 down-regulated Akt S473 phosphorylation and background neurite outgrowth in cultured DRG neurons. Conclusions: Insulin/IGF-1 therapy elevates mitochondrial function via AMPK to drive axonal repair in DSPN. Downregulation of endogenous IGF-1 in DRG neurons in diabetes may contribute to the pathogenesis of DSPN.