To examine the relationship between parasympathetic neuropathy, hyperinsulinaemia, glycaemic control (HbA(1c)), and future diabetic complications. We assessed parasympathetic nerve function [expiration/inspiration (E/I) ratio], glomerular filtration rate (GFR), glycaemic control (HbA(1c)), fasting plasma (f-p-) C-peptide in 82 Type 2 diabetic patients (age 61 +/- 1 years) 5 and 12-15 years after diagnosis. Diabetic retinopathy was assessed 15 years after diagnosis. High HbA(1c) values in the first study were associated with retinopathy (with 8.6 +/- 2.0 vs. without retinopathy 6.2 +/- 1.9%; P < 0.0001) and disturbed parasympathetic nerve function (low E/I ratio; r(s) = -0.41; P = 0.0061) in the second study, as well as with deteriorations in GFR between the first and second study (r(s) = 0.62; P < 0.0001). Patients with parasympathetic neuropathy in the first study had significantly higher f-p-C-peptide concentrations than those without 3 years (1.20 +/- 0.43 vs. 0.86 +/- 0.40 nmol/l; P = 0.0015) and 5 years (1.20 +/- 0.44 vs. 0.82 +/- 0.33 nmol/l; P < 0.0001), but not 15 years after diagnosis. High HbA(1c) values 5 years after diagnosis of Type 2 diabetes were associated with retinopathy, disturbed parasympathetic nerve function, and deterioration in GFR 7-10 years later. Parasympathetic neuropathy 5 years after diagnosis was associated with high C-peptide concentrations. Parasympathetic nerve function has to be considered when beta-cell function is evaluated. Hyperglycaemia is an important factor for the development of complications in Type 2 diabetes.