Diabetes is a worldwide epidemic, and associated neuropathy is its most costly and disabling complication. Given the rising prevalence of painful diabetic neuropathy, it is increasingly important that we understand the best ways to diagnose and treat this condition. Diagnostic tests in this field are evolving rapidly. These include the use of skin biopsies to measure small unmyelinated fibers, as well as even newer techniques that can measure both small unmyelinated fibers and large myelinated fibers in the same biopsy. The main treatments for painful diabetic neuropathy remain management of the underlying diabetes and drugs for the relief of pain. However, emerging evidence points to major differences between type 1 and type 2 diabetes, including the ability of glycemic control to prevent neuropathy. Enhanced glucose control is much more effective at preventing neuropathy in patients with type 1 diabetes than in those with type 2 disease [corrected]. This dichotomy emphasizes the need to study the pathophysiologic differences between the two types of diabetes, because different treatments may be needed for each condition. The impact of the metabolic syndrome on neuropathy in patients with type 2 diabetes may account for the difference between the two types of diabetes and requires further study. Finally, neuropathic pain is under-recognized and undertreated despite an ever evolving list of effective drugs. Evidence exists to support several drugs, but the optimal sequence and combination of these drugs are still to be determined.