Peripheral neuropathy (PN) is the most common complication of diabetes. It is characterized by sensory loss which often causes major health consequences including foot ulceration, chronic pain, poor mobility and increased risk of falls. However, present treatments do not counteract the cause of the disease, namely lack of sensory feedback, but rather aim at partial and temporal symptoms relief (e.g. analgesics for pain or creams for ulcers healing). Electrical stimulation is a promising solution for sensory restoration, but it is yet unknown if it can elicit perceivable sensations in PN damaged nerves and whether it could lead to any health or functional benefits. To this aim, we designed a wearable sensory neuroprosthesis providing targeted neurostimulation at the ankle level (NeuroStep) restoring feet lost sensations. We tested it in 14 participants with PN, evaluating its effects on functional outcomes and pain, and the cortical activation related to the restored sensations. Our system was able to restore lost sensations in all participants. The nerves of PN participants resulted significantly less excitable and sensitive than healthy individuals (N=22). Thanks to the neurostimulation, participants improved cadence and functional gait, with even stronger improvements in individuals with higher risk of falls. A full day of NeuroStep use led to a clinically significant reduction of 30.4% ± 9.2% in neuropathic pain. Restored sensations activated cortical patterns, as measured via fMRI, similar to the naturally located foot sensations, thus not requiring training by the user. NeuroStep restores intuitive sensations in PN participants, improving mobility and decreasing pain, possibly replacing multiple inefficient treatments. It holds potential to drastically improve patients quality of life thanks to functional and health benefits, while paving the way to new effective neuromodulation treatments.