Astrocytes in the hypothalamus of poorly controlled diabetic rats are reduced in number, due to increased apoptosis and decreased proliferation, and undergo morphological changes, including a decrease in projections. These changes are associated with modifications in synaptic proteins and most likely affect neuroendocrine signalling and function. The present study aimed to determine the intracellular mechanisms underlying this increase in hypothalamic cell death. Adult male Wistar rats were injected with streptozotocin (70 mg/kg, i.p) and controls received vehicle. Rats were killed at 1, 4, 6 and 8 weeks after diabetes onset (glycaemia > 300 mg/dl). Cell death, as detected by enzyme‐linked immunosorbent assay, increased at 4 weeks of diabetes. Immunohistochemistry and terminal dUTP nick‐end labelling (TUNEL) assays indicated that these cells corresponded to glial fibrillary acidic protein (GFAP) positive cells. No significant change in fragmentation of caspases 2, 3, 6, 7, 8, 9, or 12 was observed with western blot analysis. However, enzymatic assays indicated that caspase 3 activity increased significantly after 1 week of diabetes and decreased below control levels thereafter. In the hypothalamus, cell bodies lining the third ventricle, fibres radiating from the third ventricle and GFAP positive cells expressed fragmented caspase 3, with this labelling increasing at 1 week of diabetes. However, because no nuclear labelling was observed and this increase in activity did not correlate temporally with the increased cell death, this caspase may not be involved in astrocyte death. By contrast, nuclear translocation of apoptosis inducing factor (AIF) increased significantly in astrocytes in parallel with the increase in death and AIF was found in TUNEL positive cells. Thus, nuclear translocation of AIF could underlie the increased death, whereas fragmentation of caspase 3 could be associated with the morphological changes found in hypothalamic astrocytes of diabetic rats.