Longstanding diabetes mellitus targets kidney, retina, and blood vessels, but its impact upon the nervous system is another important source of disability. Diabetic peripheral neuropathy is a serious complication of inadequately treated diabetes leading to sensory loss, intractable neuropathic pain, loss of distal leg muscles, and impairment of balance and gait. Diabetes has been implicated as a cause of brain atrophy, white matter abnormalities, and cognitive impairment and a risk factor for dementia. Recent studies have incriminated advanced glycation end products (AGEs) and their receptor (RAGE) in the pathogenesis of diabetic nervous system complications. The availability of RAGE knockout mice and a competitive decoy for AGEs, soluble RAGE (sRAGE), has advanced our knowledge of the RAGE-mediated signalling pathways within the nervous system. They also provide hope for a future novel intervention for the prevention of diabetes-associated neurological complications. This review will discuss current knowledge of diabetes- and RAGE-mediated neurodegeneration, involving the distal-most level of epidermal nerve fibers in skin, major peripheral nerve trunks, dorsal root ganglia, spinal cord, and brain.