Diabetic neuropathy subsequent to chronic high blood glucose-induced nerve damage is one of the most frustrating and debilitating complications of diabetes, which affects the quality of life in patients with diabetes. Approximately 60–70% of patients with diabetes suffer from a distal symmetrical form of mild to severe neuropathy that progresses in a fiber-length-dependent pattern, with sensory and autonomic manifestations predominating. High glucose and oxidative stress-mediated damage in neurons and glial cells, as well as neuroinflammation and crosstalk between these disease processes, have garnered immense attention as the essential mechanisms underlying the development and progression of diabetic neuropathy. Although the metabolic causes of diabetic neuropathy are well understood and documented, treatment options for this disorder are still limited, highlighting the need for further studies to identify new molecular and therapeutic targets. This review covers recent advances in our knowledge of the pathophysiology of diabetic neuropathy, discusses how persistent hyperglycemic conditions and malfunctioning glia drive disease progression, and finally explores the possibilities and challenges offered by several potential novel therapeutic targets for both preventing and reversing diabetic neuropathy.