Diabetic neuropathy, a challenging contemporary problem, has a clinical prevalence of 60% problematic peripheral neuropathy occurs in about 20%. Recent concepts in aetiopathogenesis include the role of sorbitol excess and myoinositol depletion in causing deficient Na+/K+ ATPase activity. Sorbitol excess per se may result in intraneuronal oedema. Besides these metabolic hypotheses, theories on endoneurial microcapillary pathology and hypoxia have gained favour. Furthermore, a unifying concept of sorbitol excess with intraneuronal oedema leading to secondary vascular compromise has been suggested. A new research classification linking clinical and laboratory evaluation has been proposed which may serve to unify research results. Quantitative sensory testing, autonomic function testing and electrodiagnosis have been utilised to detect incipient diabetic neuropathy. The benefit of 'tight' glycaemic control has been objectively documented by using laboratory parameters. Oral myoinositol supplementation and gangliosides have produced marginal improvement. The role of intraneuronal oedema in the pathogenesis of diabetic neuropathy and its reversal by aldose reductase inhibitors holds out fresh promise for their use in prevention and treatment.