Diabetic patients have an altered gait strategy during walking and are known to be at high risk of falling, especially when diabetic peripheral neuropathy is present. This study investigated alterations to lower limb joint torques during walking and related these torques to maximum strength in an attempt to elucidate why diabetic patients are more likely to fall. 20 diabetic patients with moderate/severe peripheral neuropathy (DPN), 33 diabetic patients without peripheral neuropathy (DM), and 27 non-diabetic controls (Ctrl) underwent gait analysis using a motion analysis system and force plates to measure kinetic parameters. Lower limb peak joint torques and joint work done (energy expenditure) were calculated during walking. The ratio of peak joint torques and individual maximum joint strengths (measured on a dynamometer) was then calculated for 59 of the 80 participants to yield the ‘operating strength’ for those participants. During walking DM and DPN patients showed significantly reduced peak torques at the ankle and knee. Maximum joint strengths at the knee were significantly less in both DM and DPN groups than Ctrls, and for the DPN group at the ankle. Operating strengths were significantly higher at the ankle in the DPN group compared to the Ctrls. These findings show that diabetic patients walk with reduced lower limb joint torques; however due to a decrement in their maximum ability at the ankle and knee, their operating strengths are higher. This allows less reserve strength if responding to a perturbation in balance, potentially increasing their risk of falling.