Abnormal blood flow may be a cause of comorbidities in diabetes, including diabetic peripheral neuropathy and foot ulcerations, the leading causes of surgical amputations in adults. Improving peripheral blood flow is critical in the treatment of diabetic neuropathy and may be accomplished through exercise. While promising, blood flow effects on peripheral nerve function in diabetes have not been investigated. The purpose of this study was to examine the role of limb blood flow at baseline, during acute ischemia, and following an acute exercise treatment on peripheral nerve function in adults with type 2 diabetes (DM2). It was hypothesized that DM2 would exhibit decreased peripheral nerve function during baseline and ischemia compared with control subjects, but will exhibit improved nerve function in response to acute exercise. Furthermore, these improvements will be associated with changes in limb blood flow. Ten sedentary adults with type 2 diabetes DM2 and 10 age and BMI matched controls (C) were recruited for this investigation. Nerve function was measured the soleus muscle with electromyographic analysis of the sensorimotor reflex loop. Blood flow was measured in the soleus muscle with near infrared spectroscopy (NIRS) and the skin over the soleus with laser Doppler flowmetry (LDF). H _max/M_max ratio, a measure of motorneuron pool excitability, was significantly reduced with acute ischemia in DM2 (26.88 ± 6.6%) but not C (-3.90 ± 9.7). These changes were due to a decrease in H _max, part of EMG with a sensory and motor influence, during ischemia with no change in M_max, a variable only measuring the motor neuron. Post-exercise, H-reflex and motor responses were hypoexcitable with an accompanying hyperemia for C. In DM2, the post-exercise period resulted in a hyperexcitable H-reflex and motor response and had greater hemoglobin concentrations across conditions. In conclusion, acute ischemia decreases H-reflex thresholds in DM2 and exercise-induced increases in blood flow further decrease these thresholds. These responses are markedly more pronounced than those of controls and are accompanied by changes in the motorneuron. These differences cannot be explained by tissue oxygenation as groups were similar, but may be influenced by the surprisingly greater hemoglobin concentrations in DM2.