Diabetic patients are at high risk for peripheral arterial disease (PAD) characterized by symptoms of intermittent claudication or critical limb ischaemia. Given the inconsistencies of clinical findings in the diagnosis of PAD in the diabetic patient, measurement of ankle-brachial pressure index (ABI) has emerged as the relatively simple, non-invasive and inexpensive diagnostic tool of choice. An ABI < 0.9 is not only diagnostic of PAD even in the asymptomatic patient, but is also an independent marker of increased morbidity and mortality from cardiovascular diseases. With better understanding of the process of atherosclerosis, avenues for treatment have increased. Modification of lifestyle and effective management of the established risk factors such as smoking, dyslipidaemia, hyperglycaemia and hypertension retard the progression of the disease and reduce cardiovascular events in these patients. Newer risk factors such as insulin resistance, hyperfibrinogenaemia, hyperhomocysteinaemia and low-grade inflammation have been identified, but the advantages of modifying them in patients with PAD are yet to be proven. Therapeutic angiogenesis, on the other hand, represents a promising therapeutic adjunct in the management of PAD in these patients. Outcomes after revascularization procedures, such as percutaneous transluminal angioplasty and surgical bypasses in diabetic patients, are poorer, with increased perioperative morbidity and mortality compared with that in non-diabetic patients. Amputation rates are higher due to the distal nature of the disease. Efforts towards increasing awareness and intensive treatment of the risk factors will help to reduce morbidity and mortality in diabetic patients with PAD.