Background Diabetic patients typically complain of sensory symptoms more than motor weakness, raising the question whether diabetes has selective effects on sensory axons. The present study was undertaken to dissect and evaluate the development of diabetic neuropathy (DN) with the hypothesis that changes occur in sensory prior to motor axons. Methods The cohort of 63 type II diabetic patients underwent standard nerve conduction studies and nerve excitability techniques were undertaken in sensory and motor axons, together with HbA1C estimate and Total Neuropathy Score (TNS). Patients were further grouped based on TNS into Grade 0 (G0; TNS 0–1, n = 24), Grade 1 (G1; TNS 2–8, n = 28) and Grade 2 (G2; TNS 9–24, n = 11). Results Compared to age-matched controls, G0 asymptomatic diabetic patients had significant higher in threshold (p < 0.001) and reduction in threshold electrotonus (TE) TEd (10–20) ms (p < 0.05) in the motor recordings (Sung et al., 2012). However, in the same G0 group, their sensory axons demonstrated significant increases in threshold, prolongation in latency, down-shifting of recovery cycle (RC) increased superexcitability, reduction in late subexcitability, and increase TEd (10–20) ms (p < 0.001), indicating greater sensory axonal changes in comparison to motor. In addition, sensory excitability parameters became progressively more abnormal with increasing TNS, with further changes in RC (increased superexcitability, decreased subexcitability p < 0.01) and in TE (TEd (10–20) ms, TEh (10–20) ms, p < 0.01) as their disease progressed. When comparing G0 versus G1 the significant differences were prolonged latency and greater refractoriness in G2 (p < 0.001), while further significant changes developed in depolarizing TE (TEd (90–100) ms), S2 accommodation, P < 0.001) between G1 and G2 groups. Conclusion Taken in total, these preliminary findings suggest sensory excitability abnormalities progress with the development of diabetes, prior to motor involvement at early disease stages. Furthermore, progressive axonal dysfunctions from nodal to internodal areas evolved as the disease severity increased. These abnormalities are evidence that early changes may be detected by nerve excitability parameters, prior to clinical evidence of neuropathy and “electrodiagnostic” changes. These studies have in addition revealed progressive changes across a spectrum of sensory excitability parameters. As such, sensory excitability testing may provide an effective biomarker to provide insights into the pathophysiological mechanisms producing axonal dysfunction in patients with DN where preventative strategies can take place.