Most long-term diabetic patients develop microvascular diseases such as retinopathy, nephropathy and neuropathy. Although tight control of blood glucose greatly reduces the incidence of these complications, a significant fraction of diabetic patients with good glycemic control still develop these diseases. Therefore, it is imperative to understand the underlying mechanisms of these diseases such that effective treatment or preventive methods can be developed to augment euglycemic control. In animal studies, there is strong evidence that aldose reductase, the first and rate-limiting enzyme of the polyol pathway that converts glucose to fructose, plays a key role in the pathogenesis of microvascular complications. However, clinical trials of the aldose reductase inhibitors were disappointing and several pharmaceutical companies had abandoned the development of this line of drugs. In this review, the potential pathogenic mechanisms of the polyol pathway are presented, the evidence for the involvement of the polyol pathway in diabetic complications summarized, and the reasons for the unimpressive results of the clinical trials of the aldose inhibitors discussed. It appears that renewed efforts to develop aldose reductase inhibitors for the treatment and prevention of diabetic complications are warranted.