Our simulation of the release, diffusion, and consumption of oxygen in the capillaries and surrounding tissue of peripheral nerve now includes axial diffusion in blood and in surrounding tissue, in addition to bulk flow of blood and radial diffusion of oxygen out of the capillary. Our simulation assumes that the oxygen consumption of nerve tissue obeys Michaelis-Menten kinetics rather than zero-order kinetics as had been assumed in the Krogh model. We can calculate the oxygen tension at all points in the capillary and surrounding tissue as a function of distance from the center of the nearest capillary and distance along the capillary from the arterial to the venous end. Using average measured values for microcirculatory parameters in rat nerve, we calculated a distribution of oxygen tension values that agrees with experimentally measured distributions. The effects of axial diffusion and of Michaelis-Menten kinetics on the oxygen distributions were noticeable under normal conditions, but these effects were much more important in situations in which oxygen delivery was adversely affected.