Introduction: Tibial nerve entrapment is highly prevalent in diabetic subjects, resulting in significantly more neuropathic complaints and concomitant sensory disturbances. The study aim was to assess the impact of tarsal tunnel syndrome (TTS) and sensory loss at baseline on incident diabetic foot ulceration (DFU) in diabetic patients, since decompressing the tibial nerve might change the natural history of the disease. Methods: In this study, 113 subjects with TTS (69 bilateral, 23 left-sided and 21 right-sided) participating in the prospective Rotterdam Diabetic Foot Study were compared to 303 diabetic controls without TTS, regarding incident DFU. Kaplan-Meier analysis and Cox's regression analysis were used to determine the independent hazard of baseline variables for new DFU. Results: The median observation period was 836.5 days (IQR, 459-1077.8). In bilateral TTS, 17.4% (95% CI: 8.4-26.3%) of subjects experienced DFU versus 8.3% (95% CI: 5.1-11.6%) in controls (left or right) during follow-up (p = 0.0036). In left-sided TTS, no subjects versus 6.2% (95% CI: 3.4-9.0%) in controls had DFUs (p = 0.243). Incident ulceration was seen in 14.3% (95% CI: −0.7% to −29.3%) of right-sided TTS subjects versus 4.1% (95% CI: 1.5-6.3%) in controls (p = 0.034). Besides HbA1c, diminished sensation at the hallux independently increased the Dates and sites of presentation: