Objective To study the effects of systemic inflammation on the damage of blood brain barrier (BBB), innate immune cell activation and neuronal degeneration in basal ganglia of diabetic mice and the related mechanisms. Methods Diabetic mouse model was established by intraperitoneal injection of streptozotocin. The system inflammation was induced by intraperitoneal injection of lipopolysaccharide (LPS). The mice were divided into diabetic group, diabetic plus LPS group and control group. The activation of microglia and astrocyte in the area of basal ganglia and protein expression of Occludin in BBB were detected by immunofluoresence. Neuronal degeneration was detected by toluidine blue staining, and matrix metalloproteinase (MMPs) activity was detected by gelatin substrate gel zymography. Results Compared with control group, the number of neurons in the basal ganglia was significantly decreased in the diabetic group (P<0.01) and the number of active microglia was significantly increased (P<0.01). Compared with the diabetic group, the diabetic plus LPS group had significantly decreased neurons in the basal ganglia and significantly increased active microglia and astrocytes (P<0.05 or P<0.01). MMP-9 was significantly activated in diabetic group compared with that in the control group, and that in the diabetic plus LPS group was significantly activated compared with that in the diabetic group (P<0.05). However, the MMP-2 activities were not significantly different among the three groups. Occludin expression in the basal ganglia was decreased in the diabetic group compared with control group, and a more greater decrease was found in diabetic plus LPS group. Conclusion Hyperglycemia can lead to inflammatory cell activation in the basal ganglia, BBB damage and neuronal degeneration in mice; and systemic inflammation can aggravate the pathological process in the basal ganglia.