In this article we describe differences in early metabolic abnormalities between type 1 and type 2 diabetic polyneuropathy (DPN), and how these differences lead to milder initial functional defects in type 2 diabetes, despite the same hyperglycemic exposures. This early reversible metabolic phase is progressively overshadowed by structural degenerative changes eventually resulting in nerve fiber loss. In comparison, the late structural phase of DPN affects type 1 diabetes more severely. Progressive axonal atrophy and loss is hence expressed to a larger extent in type 1 diabetes. In addition, type 1 DPN is characterized by paranodal degenerative changes not seen in type 2 DPN. These differences can be related to the differences in insulin action and signal transduction affecting the expression of neurotrophic factors and their receptors in type 1 diabetes. Downstream effects on neuroskeletal and adhesive proteins, their posttranslational modifications, and nociceptive peptides underlie the more severe resultant pathology in type 1 DPN. These differences in underlying mechanisms should be seriously considered in the future design of interventional paradigms to combat these common conditions.