Sensory neurons have the capacity to produce, release, and respond to acetylcholine (ACh), but the functional role of cholinergic systems in adult mammalian peripheral sensory nerves has not been established. Here, we have reported that neurite outgrowth from adult sensory neurons that were maintained under subsaturating neurotrophic factor conditions operates under cholinergic constraint that is mediated by muscarinic receptor–dependent regulation of mitochondrial function via AMPK. Sensory neurons from mice lacking the muscarinic ACh type 1 receptor (M1R) exhibited enhanced neurite outgrowth, confirming the role of M1R in tonic suppression of axonal plasticity. M1R-deficient mice made diabetic with streptozotocin were protected from physiological and structural indices of sensory neuropathy. Pharmacological blockade of M1R using specific or selective antagonists, pirenzepine, VU0255035, or muscarinic toxin 7 (MT7) activated AMPK and overcame diabetes-induced mitochondrial dysfunction in vitro and in vivo. These antimuscarinic drugs prevented or reversed indices of peripheral neuropathy, such as depletion of sensory nerve terminals, thermal hypoalgesia, and nerve conduction slowing in diverse rodent models of diabetes. Pirenzepine and MT7 also prevented peripheral neuropathy induced by the chemotherapeutic agents dichloroacetate and paclitaxel or HIV envelope protein gp120. As a variety of antimuscarinic drugs are approved for clinical use against other conditions, prompt translation of this therapeutic approach to clinical trials is feasible.