Diabetic peripheral neuropathy is believed to cause postural instability due to abnormal proprioception. We assessed body sway in four groups, each of 20 subjects, matched for age, sex, and BMI: non-diabetic controls, non-neuropathic diabetic controls, subjects with diabetic neuropathy and no history of foot ulceration, and subjects with diabetic neuropathy and a history of foot ulceration. Postural sway was assessed on a Kistler force plate using the Romberg test, measuring the standard deviation of the centre of pressure in both sagittal (antero-posterior movement) and frontal (side to side movement) planes with eyes open and closed. The Romberg test results were log transformed and then analysed using analysis of variance followed by Newman-Keuls test. There was no significant difference in body sway between the two control groups and the first group of subjects with diabetic neuropathy. However, in patients with a history of ulceration, values were significantly higher (p < 0.05) compared to all other groups in both planes and conditions studied. These results are suggestive of a relationship between impaired body sway control and foot ulceration. Postural instability may have clinical significance and increase the risk of minor trauma and ulceration in patients with diabetic neuropathy.