By using pseudorabies virus expressing green fluorescence protein, we found that efferent bone marrow-neural connections trace to sympathetic centers of the central nervous system in normal mice. However, this was markedly reduced in type 1 diabetes, suggesting a significant loss of bone marrow innervation. This loss of innervation was associated with a change in hematopoiesis toward generation of more monocytes and an altered diurnal release of monocytes in rodents and patients with type 1 diabetes. In the hypothalamus and granular insular cortex of mice with type 1 diabetes, bone marrow-derived microglia/macrophages were activated and found at a greater density than in controls. Infiltration of CD45(+)/CCR2(+)/GR-1(+)/Iba-1(+) bone marrow-derived monocytes into the hypothalamus could be mitigated by treatment with minocycline, an anti-inflammatory agent capable of crossing the blood-brain barrier. Our studies suggest that targeting central inflammation may facilitate management of microvascular complications.