Diabetes mellitus impairs peripheral nerve regeneration. Regenerative failure likely exacerbates deficits from polyneuropathy or focal neuropathies in patients who might otherwise exhibit spontaneous improvement. Some focal neuropathies, like carpal tunnel syndrome, are common, yet render ongoing disability because of their delayed recovery. Why diabetic nerves fail to regenerate is an interesting question to consider because several mechanisms likely contribute. In this review, we examine a number of these causes. These causes include microangiopathy or disease of small blood vessels, failure to provide proper metabolic support for repair, defects in the entry and actions of inflammatory cells within the injury milieu, less robust support of axons by their Schwann cells, and lack of a full repertoire of trophic factors. A number of the mechanisms that generate neuropathy in the first place also likely contribute to failed regenerative programs, but how they do so is not clear.