Lower extremity ulcers represent a major concern for patients with diabetes and for those who treat them, from both a quality of life and an economic standpoint. Studies to evaluate quality of life have shown that patients with foot ulcers have decreased physical, emotional, and social function. Analyses of economic impact have shown (1) the majority of costs occur in the inpatient setting, (2) a lack of financial benefit when comparing primary amputation with an aggressive approach to limb salvaging including vascular reconstruction, and (3) private insurance provides greater reimbursement for inpatient care than does Medicare. Results of etiologic studies suggest that hyperglycemia induces diabetes-related complications through sorbitol accumulation and protein glycation, and the resultant nerve damage manifests as peripheral neuropathy, which predisposes to ulcer development. Patients with diabetes also have an increased incidence of peripheral vascular disease, impaired wound healing, and decreased ability to fight infection. In light of these factors, it is sometimes difficult to determine the optimal course for patient management. This review is aimed at helping healthcare providers make better decisions about treatment, resource use, and strategies for future foot ulcer prevention.