Pre-diabetes and diabetes are a global epidemic, and the associated neuropathic complications create a substantial burden on both the afflicted patients and society as a whole. Given the enormity of the problem and the lack of effective therapies, there is a pressing need to understand the mechanisms underlying diabetic neuropathy (DN). In this review, we present the structural components of the peripheral nervous system that underlie its susceptibility to metabolic insults and then discuss the pathways that contribute to peripheral nerve injury in DN. We also discuss systems biology insights gleaned from the recent advances in biotechnology and bioinformatics, emerging ideas centered on the axon-Schwann cell relationship and associated bioenergetic crosstalk, and the rapid expansion of our knowledge of the mechanisms contributing to neuropathic pain in diabetes. These recent advances in our understanding of DN pathogenesis are paving the way for critical mechanism-based therapy development.