Previously we demonstrated that a vasopeptidase inhibitor of angiotensin converting enzyme and neutral endopeptidase (NEP), a protease that degrades vaso- and neuro-active peptides, improves neural function in diabetic rodent models. The purpose of this study was to determine whether inhibition or deletion of NEP provides protection from neuropathy caused by diabetes with an emphasis on morphology of corneal nerves as a primary endpoint. Diabetes, modeling type 2, was induced in C57Bl/6J and NEP deficient mice through a combination of a high fat diet and streptozotocin. To inhibit NEP activity, diabetic C57Bl/6J mice were treated with candoxatril using a prevention or intervention protocol. Twelve weeks after the induction of diabetes in C57Bl/6J mice, the existence of diabetic neuropathy was determined through multiple endpoints including decrease in corneal nerves in the epithelium and sub-epithelium layer. Treatment of diabetic C57Bl/6J mice with candoxatril improved diabetic peripheral neuropathy and protected corneal nerve morphology with the prevention protocol being more efficacious than intervention. Unlike C57Bl/6J, mice deficient in NEP were protected from the development of neuropathologic alterations and loss of corneal nerves upon induction of diabetes. These studies suggest that NEP contributes to the development of diabetic neuropathy and may be a treatable target.