Impaired rate-dependent depression (RDD) of the spinal H-reflex occurs in diabetic rodents and a sub-set of patients with painful diabetic neuropathy. RDD is unaffected in animal models of painful neuropathy associated with peripheral pain mechanisms and diabetic patients with painless neuropathy, suggesting RDD could serve as a biomarker for individuals in whom spinal disinhibition contributes to painful neuropathy and help identify therapies that target impaired spinal inhibitory function. The spinal pharmacology of RDD was investigated in normal rats and rats after 4 and 8 weeks of streptozotocin-induced diabetes. In normal rats, dependence of RDD on spinal GABAergic inhibitory function encompassed both GABA and GABA receptor sub-types. The time-dependent emergence of impaired RDD in diabetic rats was preceded by depletion of potassium-chloride co-transporter 2 (KCC2) protein in the dorsal, but not ventral, spinal cord and by dysfunction of GABA receptor-mediated inhibition. GABA receptor-mediated spinal inhibition remained functional and initially compensated for loss of GABA receptor-mediated inhibition. Administration of the GABA receptor agonist baclofen restored RDD and alleviated indices of neuropathic pain in diabetic rats, as did spinal delivery of the carbonic anhydrase inhibitor acetazolamide. Pharmacological manipulation of RDD can be used to identify potential therapies that act against neuropathic pain arising from spinal disinhibition.