Diabetic neuropathy is characterized by progressive degeneration of nerve fibers associated with diabetes mellitus. Antidepressants and anticonvulsants are the mainstay of pharmacological treatment, but are often limited in effectiveness against the core clinical feature of pain. In the current study, we examined the potential effects of koumine, a Gelsemium elegans B ENTH alkaloid, using a rat model of diabetic neuropathy. Rats were administered intraperitoneally a single dose of streptozocin (60 mg/kg) to induce type 1 diabetes. Koumine was given at a dose range of 0.056–7 mg/kg subcutaneously for one week starting 3 weeks after streptozocin adminstration. Behavioral responses to mechanical stimuli were evaluated every day after streptozocin injection. At 4 weeks after streptozocin injection, sensory nerve conduction velocity (SNCV) and morphological alternation of sciatic nerves were assessed by electron microscopy. Diabetic rats developed mechanical hyperalgesia within 3 weeks after streptozocin injection and exhibited reduced SNCV and impaired myelin/axonal structure. Koumine treatment of diabetic rats decreased neuropathic pain behavior as early as after the first administration. At a dose of 7 mg/kg, koumine was more effective than gabapentin (100 mg/kg), and decreased mechanical sensitivity threshold to a level comparable to healthy control. Repeated treatment of koumine significantly reduced the damage to axon and myelin sheath of the sciatic nerve and increased SNCV, without affecting body weight and blood glucose. These findings encourage the use of koumine in the treatment of diabetic neuropathy.