There is an increasing prevalence of diabetes mellitus (DM) and diabetic peripheral neuropathy (DPN) in older people in many countries across the world. Older adults with type 2 DM have a significantly higher incidence of falls compared with their counterparts without DM. This review synthesize published findings on sensorimotor, cognitive, balance and mobility impairments, and their associations with falls in people with DM and DPN. Given the high incidence of falls and resulting serious consequences, systematically assessing fall risk in people with DM may optimize fall prevention strategies and reduce the associated morbidity, mortality and the rehabilitation costs for people with these conditions. These findings indicate balance, gait, sensorimotor and cognitive assessments should be administered to DM patients, especially in those with DPN, to document impairment levels and target interventions to reduce falls and associated morbidity, mortality and rehabilitation costs.