Aims/Introduction: Limited studies have identified risk factors linked to the progression of diabetic peripheral neuropathy (DPN) in type 2 diabetes. This study examined the association of risk factors with change in neuropathy measures over 2 years. Materials and Methods: Participants with type 2 diabetes (n = 78) and controls (n = 26) underwent assessment of clinical and metabolic parameters and neuropathy using corneal confocal microscopy (CCM), vibration perception threshold (VPT), and the DN4 questionnaire at baseline and 2 year follow-up. Results: Participants with type 2 diabetes had a lower corneal nerve fiber density (CNFD), branch density (CNBD), and fiber length (CNFL) (P ≤ 0.0001) and a higher VPT (P ≤ 0.01) compared with controls. Over 2 years, despite a modest reduction in HbA1c (P ≤ 0.001), body weight (P ≤ 0.05), and LDL (P ≤ 0.05) the prevalence of DPN (P = 0.28) and painful DPN (P = 0.21) did not change, but there was a significant further reduction in CNBD (P ≤ 0.0001) and CNFL (P ≤ 0.05). CNFD, CNBD, and CNFL decreased significantly in physically inactive subjects (P < 0.05-0.0001), whilst there was no change in CNFD (P = 0.07) or CNFL (P = 0.85) in physically active subjects. Furthermore, there was no change in CNFD (P = 0.82), CNBD (P = 0.08), or CNFL (P = 0.66) in patients treated with glucose lowering medication associated with weight loss, whilst CNBD (P = 0.001) decreased in patients on glucose lowering medication associated with weight gain. Conclusions: In participants with type 2 diabetes, despite a modest improvement in HbA1c, body weight, and LDL there was a progressive loss of corneal nerve fibers; except in those who were physically active or on glucose lowering medication associated with weight loss.