Recent findings have shed new light on the role of peripheral nerves in the skin and have established a modern concept of cutaneous neurobiology. There is bidirectional rather than unidirectional (conveying information from the periphery) signaling between central and peripheral nerves and the endocrine and immune systems. This interaction is mediated principally by cutaneous small nerve fibers and will influence a variety of physiologic and pathophysiologic functions central to wound healing, which include cellular development, growth, differentiation, immunity, vasoregulation, and leukocyte recruitment. Thus, disease of the small fibers in diabetic patients is frequent and may have a considerable impact on the predisposition and subsequent wound-healing response to foot ulceration. The authors review the basic pathophysiology, clinical consequences, and current methods to evaluate somatic and autonomic nerve fiber dysfunction and damage.