In order to determine the involvement of denervation in endothelium‐independent, nitric oxide (NO)‐dependent smooth muscle vasodilatation, we have measured vascular endothelial and smooth muscle function in three groups of age‐ and sex‐matched patients: 8 patients with non‐insulin‐dependent (Type 2) diabetes mellitus (NIDDM) with neuropathy; 7 NIDDM patients without neuropathy; and 10 non‐diabetic control subjects. Laser Doppler probes were used to measure blood flow in the dorsum of the left foot. Vascular endothelial response was assessed by measuring vasodilatory responses to iontophoretic application of acetylcholine to the dorsum of the foot. Vascular smooth muscle activity was assessed by the response to iontophoresis of sodium nitroprusside (SNP)—a NO donor and direct vasodilator. The vasodilator response to acetylcholine, expressed as the ratio of peak to basal blood flow, was significantly reduced in both diabetic groups when compared to non‐diabetic controls (geometric mean ×/÷ anti‐logged SD 9.81 ×/÷ 1.65 versus patients with neuropathy 3.50 ×/÷ 2.03, p < 0.005 and diabetic non‐neuropathic subjects 3.49 ×/÷ 1.67, p < 0.005). The difference between the two groups of diabetic patients was not significant. In contrast, the vasodilatation to nitroprusside was significantly reduced only in the diabetic neuropathic patients, significantly lower than in either the non‐neuropathic diabetic controls or the non‐diabetic controls (2.1 ×/÷ 2.0 versus 6.42 ×/÷ 1.56 and 7.02 ×/÷ 2.05, p < 0.005). This indicates that neuropathy is important in abnormalities of endothelium‐independent vasodilatation. © 1997 by John Wiley & Sons, Ltd.