Diabetic neuropathy is a common complication in diabetes mellitus. Diabetic neuropathy is accompanied by alterations in axonal excitability, which can lead to either "positive" (paresthesia, dysesthesia, pain) and/or "negative" (hypesthesia, anesthesia) symptoms. The mechanisms underlying these alterations in axonal excitability are not well understood. Clinical tests reveal reduced nerve conduction velocity and axonal loss, but fail to explain nerve excitability. Many different factors have been suggested in relation to the pathophysiology of diabetic neuropathy. There are probably as many factors as there are different clinical pictures in diabetic neuropathy. Nevertheless, it seems that hyperglycemic hypoxia is mainly responsible for the electrophysiological changes seen in damaged diabetic nerves. This article summarizes experimental data indicating that a dysfunction of ion conductances, especially voltage-gated ion channels, could contribute to abnormalities in the generation and/or conduction of action potentials in diabetic neuropathy.