Diabetic neuropathy is a complex disorder induced by long standing diabetes. Many signaling pathways and transcription factors have been proposed to be involved in the development and progression of related processes. Years of research points to critical role of oxidative stress, neuroinflammation and apoptosis in the pathogenesis of neuropathy in diabetes. Heme oxygenase-1 (HO-1) is heat-shock protein induced under conditions of different kinds of stress and has been implicated in cellular defense against oxidative stress. HO-1 degrades heme to biliverdin, carbon monoxide (CO) and free iron. Biliverdin and CO are gaining particular interest because these two have been found to mediate most of anti-inflammatory, antioxidant and anti-apoptotic effects of HO-1. Although extensively studied in different kinds of cancers and cardiovascular conditions, role of HO-1 in diabetic neuropathy is still under investigation. In this paper, we review the unique therapeutic potential of HO-1 and its role in mitigating various pathological processes that lead to diabetic neuropathy. This review also highlights the therapeutic approaches such as pharmacological and natural inducers of HO-1, gene delivery of HO-1 or its reaction products that in future, could lead to progression of HO-1 activators through the preclinical stages of drug development to clinical trials.