In an attempt to evaluate the morphological abnormalities of dermal non-myelinated nerve fibers of diabetics and elucidate the pathogenesis of diabetic peripheral neuropathy, the terminal part of peripheral nerve in the upper dermis was observed on electron microscopy using skin samples biopsied in 10 diabetics with symptomatic neuropathy and 6 age-matched controls. In diabetics, the density of nerve fibers was significantly lower than in controls. In addition, swelling, lytic change and vacuolation in the axon, multiplication of basement membrane of the Schwann cell and Schwann cell cluster devoid of axon were more frequently observed in diabetics. The Schwann cell did not show significant structural alterations. These findings suggest that the axon is primarily involved, at least in the terminal region of nerve fiber, in diabetic peripheral neuropathy. It is also concluded that the skin biopsy technique is harmless, cosmetically not troublesome and might be beneficial for studying peripheral neuropathies including diabetic neuropathy.