Lesioned fascicles (LF) in the sciatic nerves of individuals with diabetic neuropathy (DN) correlate with clinical symptom severity. This study aimed to characterize the structural and molecular composition of these lesions to better understand DN pathogenesis. Sciatic nerves from amputees with and without type 2 diabetes (T2D) were examined using ex vivo magnetic resonance neurography, in vitro imaging, and proteomic analysis. Lesions were only found in T2D donors and exhibited significant structural abnormalities, including axonal degeneration, demyelination, and impaired blood nerve barrier (BNB). While non-lesioned fascicles from T2D donors showed activation of neuroprotective pathways, lesioned fascicles lacked this response and instead displayed increased complement activation via the classical pathway. The detection of liver-derived acute-phase proteins suggests that BNB disruption facilitates harmful inter-organ communication between the liver and nerves. These findings reveal key molecular mechanisms contributing to DN and highlight potential targets for therapeutic intervention.