Onychomycosis is a common medical condition in patients with diabetes. Conflicting data exist as to whether diabetes predisposes patients to the disease. Controversy notwithstanding, patients with diabetes have several medical conditions (obesity, peripheral neuropathy, and retinopathy) that can inhibit the identification or mask the progression of fungal nail infections. In addition, vascular insufficiency, impaired wound healing, and compromised immunologic status associated with diabetic foot increase the risk of secondary infections in diabetic patients with onychomycosis. Such factors contribute to an increased morbidity and decreased quality of life in these patients and underscore the need for effective antifungal treatment. Oral antifungal agents are generally well tolerated, but serious adverse events independent of or associated with a number of significant drug interactions have been reported. The availability of a topical therapy, ciclopirox topical solution, 8% (Penlac Nail Lacquer), provides clinicians with an additional effective and well-tolerated treatment option. In order to further increase the efficacy of topical or oral treatment, mechanical intervention (e.g., debridement) may be combined with either of these options. Choice of appropriate treatment and careful monitoring of fungal nail infections can prevent significant morbidity in patients with diabetes.