The aim of this study was to investigate the microscopic and biochemical effects of vanadyl sulfate on liver tissue of normal and streptozotocin (65 mg/kg) diabetic rats. Vanadyl sulfate was administered by gavage at a dose of 100 mg/kg. Degenerative changes were observed in diabetic animals by light and transmission electron microscopes. Although there were individual differences in diabetic animals to which vanadium was given, some reduction of degenerative changes were detected. After 60 d of treatment, serum aspartate and alanine transaminase, alkaline phosphatase, blood glucose levels, liver lipid peroxidation, and nonenzymatic glycosylation significantly increased, but liver glutathione levels significantly decreased in the diabetic group. On the other hand, treatment with vanadyl sulfate reversed these effects. As a result, it might be concluded that vanadyl sulfate has a protective effect on damage of liver of streptozotocin-induced diabetic rats.