A better understanding of the molecular mechanisms underlying the development and progression of diabetic neuropathy (DN) is essential for the design of mechanism-based therapies. We examined changes in global gene expression to define pathways regulated by diabetes in peripheral nerve. Microarray data for 24 week-old BKS db/db and db/+ mouse sciatic nerve were analyzed to define significantly differentially expressed genes (DEGs); DEGs were further used for functional enrichment analysis and network analysis to identify biological processes and pathways differentially regulated in the db/db nerve. Expression profile clustering was performed to identify co-expressed DEGs. A set of co-expressed lipid metabolism genes was used for promoter sequence analysis.We identified 4,017 DEGs; 2,122 genes were up-regulated and 1,895 genes were down-regulated in the db/db relative to the db+ samples. Over-represented biological processes identified by the functional enrichment analysis include cell cycle, lipid metabolic process, lipid transport, carbohydrate metabolic process, response to stress, apoptosis, axonogenesis and cell adhesion. Pathways regulated in the db/db nerve include lipid metabolism, carbohydrate metabolism, energy metabolism, PPAR signaling, apoptosis, and axon guidance. The majority of DEGs in the glycolysis, TCA cycle, oxidative phosphorylation, fatty acid metabolism, glycerolipid metabolism, mitochondrial fatty acid elongation, lipid transport, adipocytokine signaling, PPAR signaling, and apoptosis pathways are up-regulated, whereas most of the axonogenesis-related genes are down-regulated in db/db nerve. A network of DEGs based on their co-citation in literature identified regulatory relationship between Tnf- and key genes from the regulated pathways. Promoter sequence analysis identified over-represented transcription factor binding site (TFBS) motifs in the promoter regions of twenty two co-expressed lipid metabolism-related genes suggesting coordinated regulation of these genes by multiple transcription factors (TF). Furthermore, TF binding to these TFBS and differentially regulated in our data are annotated with nervous system development and immune response suggesting possible co-regulation of lipid metabolism, nervous system development and stress response genes. Gene expression changes in our data are consistent with pathological characteristics observed in DN including axon degeneration and demyelination, and support existing hypotheses regarding hyperglycemia mediated nerve damage in DN. Our findings support the role of hyperglycemia-induced oxidative stress and ischemia in nerve injury. Our results also support the hypothesis of oxidized lipid-mediated nerve injury and increased mitochondrial oxidative stress in dyslipidemia. Moreover, our analyses revealed a possible co-regulation mechanism connecting hyperlipidemia, stress response and axonal degeneration.