Sensory loss and impaired balance are considered risk factors of incident falls. The aim of this study was to assess the relationship between degree of foot sensation and balance, risk of falls, incidence of fall-related injuries and costs in a cohort of patients with diabetes. Methods: (Non)-neuropathic subjects participating in the Rotterdam Diabetic Foot Study were followed prospectively. Subjects underwent sensory testing of the feet (39 item Rotterdam Diabetic Foot Study Test Battery (RDF-39)); balance was assessed at the second followup (Brief-BESTest) as were data on incident falls. Medical records and financial data were abstracted to estimate fall-related morbidity and in-hospital costs. Results: A higher RDF-39 score, cerebral artery disease, type 2 diabetes, height and age were predictors of the Brief-BESTest total score. 41/296 patients (13.9%) reported two or more falls during follow-up. Predictors for recurrent falls were a higher RDF-39 score (aOR: 1.124, p < 0.0005), male gender (aOR: 0.319, p = 0.016), age (aOR: 0.938, p = 0.003) and type 2 diabetes (aOR: 3.157, p = 0.100). Thirty-one patients used medical resources (median US $ 440.45 (IQR: 179-1162). Conclusions: Degree of sensory loss correlates significantly with an increased imbalance and risk of falls. The RDF-39 may be used as stratification tool in medical decisionmaking and patient information.