Adult neurogenesis in dentate gyrus (DG) is an evolutionarily preserved trait in most mammals examined thus far. Neuronal proliferation and subsequent integration of new neurons into the hippocampal circuit are regulated processes that can have profound effects on an animal's behaviour. A streptozotocin model of type I diabetes, characterized by low insulin and high plasma glucose levels, affects not only body's overall metabolism but also brain activity. Neurogenesis was measured within the DG of the hippocampus using immunohistochemical markers Ki67, Doublecortin, Calbindin (CaBP) and bromodeoxyuridine (BrdU). Cell proliferation, measured with the endogenous marker Ki67, was reduced by 45%, and cell survival, measured with BrdU, was reduced by 64% of the control. Combined effects on proliferation and survival produced dramatically lower neuronal production. Among the surviving cells only 33% matured normally as judged by the co-labelling of BrdU and CaBP. Such a reduction lowered the number of surviving cells with neuronal phenotype by over 80% of the control values and this is expected to cause a significant functional impairment of learning and memory in diabetic animals. These results may shed light on causes of diabetic neuropathology and provide an explanation for the memory deficiencies seen in some diabetic patients.