The primary diabetes-related health concerns are neuropathy and cardiovascular changes. Connective tissue changes can also affect quality of life by increasing ligament and joint capsule stiffness, impairing proprioception, limiting function, and leading to greater risk of falling. Our objectives were to evaluate effects of Type I diabetes and exercise on medial collateral ligament properties and overall knee-joint stiffness and stress relaxation. Thirty-four male Sprague–Dawley rats, approximately two months old, were divided into three groups—sedentary controls (n=10), sedentary diabetics (n=10) and exercised diabetics (n=14). Diabetes was induced by streptozotocin injection. Exercised rats ran 5 days/week, 1 hr/day, at 20 m/min. All animals were sacrificed seven weeks after induction of diabetes. Stiffness and stress relaxation of the whole knee joint was tested in distraction and anterior–posterior tibial displacement. The joint capsule and knee ligaments were then sectioned, preserving the medial collateral ligament (MCL). The MCL structural properties were tested by knee distraction at a flexion angle of 40°. Whole joint stiffness was 23% higher for anterior tibial displacement in the exercised diabetic group, and 31% higher for posterior tibial displacement, compared to controls. Whole joint stress relaxation in distraction was 25% lower for the exercised diabetic group. No differences were found for MCL properties. Diabetes and exercise clearly increased joint stiffness. The effects may be due to tissue adaptation, but appear more likely to be due to increased blood flow that promotes increased tissue glycation in the joint capsule.