Diabetic neuropathy consists of several clinical syndromes affecting motor, sensory and autonomic nerves. Of these the most common is distal symmetric sensory polyneuropathy usually referred to as diabetic neuropathy. Animal studies, mainly in diabetic rodents, have contributed tremendously to our understanding of this disease. From these it is clear that the pathogenesis of diabetic neuropathy is multifactorial involving sequentially occurring and often closely interrelated metabolic aberrations. Major pathogenetic mechanisms include increased activity of the polyol pathway, abnormalities in vasoactive substances, non-enzymatic glycation, increased presence of free radicals, and perturbed neurotrophism. Traditionally the neuropathies accompanying Type I (insulin-dependent) and Type II (non-insulin-dependent) diabetes mellitus have been regarded as identical. Recent investigations have, however, clearly delineated distinct differences in the functional and structural expressions of the neuropathies in the two types of diabetes. Major future challenges are the identification of the differences in underlying pathogenetic mechanisms in the two types of neuropathy and in gaining a better understanding of the hierarchy of the multifactorial mechanisms underlying the disease. This will be important for designing meaningful therapies which to date have failed miserably in diabetic neuropathy.