Diabetic neuropathy is the most common peripheral neuropathy in western countries. Although every effort has been made to clarify the pathogenic mechanism of diabetic neuropathy, thereby devising its ideal therapeutic drugs, neither convinced hypotheses nor unequivocally effective drugs have been established. In view of the pathologic basis for the treatment of diabetic neuropathy, it is important to enhance nerve regeneration as well as prevent nerve degeneration. Nerve regeneration or sprouting in diabetes may occur not only in the nerve trunk but also in the dermis and around dorsal root ganglion neurons, thereby being implicated in the generation of pain sensation. Thus, inadequate nerve regeneration unequivocally contributes to the pathophysiologic mechanism of diabetic neuropathy. In this context, the research on nerve regeneration in diabetes should be more accelerated. Indeed, nerve regenerative capacity has been shown to be decreased in diabetic patients as well as in diabetic animals. Disturbed nerve regeneration in diabetes has been ascribed at least in part to all or some of decreased levels of neurotrophic factors, decreased expression of their receptors, altered cellular signal pathways and/or abnormal expression of cell adhesion molecules, although the mechanisms of their changes remain almost unclear. In addition to their steady-state changes in diabetes, nerve injury induces injury-specific changes in individual neurotrophic factors, their receptors and their intracellular signal pathways, which are closely linked with altered neuronal function, varying from neuronal survival and neurite extension/nerve regeneration to apoptosis. Although it is essential to clarify those changes for understanding the mechanism of disturbed nerve regeneration in diabetes, very few data are now available. Rationally accepted replacement therapy with neurotrophic factors has not provided any success in treating diabetic neuropathy. Aside from adverse effects of those factors, more rigorous consideration for their delivery system may be needed for any possible success. Although conventional therapeutic drugs like aldose reductase (AR) inhibitors and vasodilators have been shown to enhance nerve regeneration, their efficacy should be strictly evaluated with respect to nerve regenerative capacity. For this purpose, especially clinically, skin biopsy, by which cutaneous nerve pathology including nerve regeneration can be morphometrically evaluated, might be a safe and useful examination.