This study investigated sensory and motor nerve excitability properties to elucidate the development of diabetic neuropathy. A total of 109 type 2 diabetes patients were recruited, and 106 were analyzed. According to neuropathy severity, patients were categorized into G0, G1, and G2+3 groups using the total neuropathy score-reduced (TNSr). Patients in the G0 group were asymptomatic and had a TNSr score of 0. Sensory and motor nerve excitability data from diabetic patients were compared with data from 33 healthy controls. Clinical assessment, nerve conduction studies, and sensory and motor nerve excitability testing data were analyzed to determine axonal dysfunction in diabetic neuropathy. In the G0 group, sensory excitability testing revealed increased stimulus for the 50% sensory nerve action potential (P<0.05), shortened strength-duration time constant (P<0.01), increased superexcitability (P<0.01), decreased subexcitability (P<0.05), decreased accommodation to depolarizing current (P<0.01), and a trend of decreased accommodation to hyperpolarizing current in threshold electrotonus. All the changes progressed into G1 (TNSr 1-8) and G2+3 (TNSr 9-24) groups. In contrast, motor excitability only had significantly increased stimulus for the 50% compound motor nerve action potential (P<0.01) in the G0 group. This study revealed that the development of axonal dysfunction in sensory axons occurred prior to and in a different fashion from motor axons. Additionally, sensory nerve excitability tests can detect axonal dysfunction even in asymptomatic patients. These insights further our understanding of diabetic neuropathy and enable the early detection of sensory axonal abnormalities, which may provide a basis for neuroprotective therapeutic approaches.