OBJECTIVE This study examined the association of comorbidities, healthcare service use, and costs for diabetes patients with and without painful diabetic peripheral neuropathy (pDPN). METHODS This was a retrospective, cohort analysis of data from members of a health maintenance organization. Patients with pDPN identified from a previously validated algorithm that was based on inclusion ICD-9 diagnosis codes consistent with signs and symptoms of peripheral neuropathy, as well as ICD-9 diagnosis codes to exclude non-diabetic etiologies. These subjects were matched 2 : 1 to patients without pDPN on age (+/-4 years), gender, and HbA(1c) stratum (<7%, 7-9%, and >9%) based on median HbA(1c) measured in 2002. Administrative data associated with outpatient and hospital-based care for the year 2003 were used to estimate healthcare service utilization and costs. Chi-square, univariate, and multivariate regression analyses were employed to estimate the variation in healthcare service utilization and costs. RESULTS After applying inclusion and exclusion criteria, 1543 patients with pPDN were matched to 3069 patients without pDPN among prevalent diabetes cases. Patients with pDPN had significantly higher prevalence of comorbidities, including twice as many limb infections and nearly ten-fold greater limb amputations, and had consistently higher healthcare service utilization and costs across categories of care. The likelihood of any hospital admission for pDPN patients was more than 2.5-fold higher relative to patients without pDPN, and the excess cost associated with pDPN was estimated to be almost $6000 for the calendar year. CONCLUSIONS The presence of pDPN in patients with diabetes was associated with significantly greater comorbidity, greater healthcare service utilization, and higher costs. While this study is limited to the direct medical care costs borne by the health plan, given the association of comorbidities and cost for patients with pDPN, further investigation is needed to determine if management approaches that are effective across chronic illnesses may prove to be beneficial for high cost diabetes patients.