Impaired glucose tolerance creates a peripheral nervous system that is susceptible to chronic nerve compression. While it is accepted that surgical decompression of the median nerve at the wrist, for carpal tunnel syndrome, is appropriate in the diabetic, application of this concept to the lower extremity has not yet gained widespread recognition. Traditional electrodiagnostic studies demonstrate the presence of neuropathy, but usually are much less able to demonstrate superimposed nerve compression in the lower extremity in the presence of neuropathy. The clinician must rely upon the presence of a positive Hoffmann-Tinel sign to identify the patient with diabetic neuropathy and nerve compression. Combining sensory territories of common peroneal and tibial nerves gives a stocking pattern of sensory impairment. A positive Hoffmann-Tinel sign over the tibial nerve in the tarsal tunnel has a 90 % positive predictive value for the diabetic patient to recover sensibility in the foot after decompression of the four medial ankle tunnels. A meta-analysis of clinical studies that have decompressed the tibial nerve branches at the ankle in diabetics with neuropathy and tibial nerve compression demonstrate pain relief in 80 % of the patients from a mean of 8.5 on the VAS to 2.0, and demonstrate 80 % of the patients recover more than just protective sensation. With sensibility partially restored, ulceration and subsequent amputation can be prevented. Balance can recover, and with it, morbidity from falls/fracture can be prevented. Hospitalization for foot infection can be reduced. This review includes description of the surgical approaches to accomplish these outcomes.