To evaluate the structural changes in corneal sub-basal nerves of dry eye disease (DED) patients with tear hyperosmolarity versus normosmolar tears. A prospective evaluation of the tear film (keratograph 5M), tear osmolarity, and sub-basal corneal nerves (laser scanning in-vivo confocal microscopy) was performed in a cohort of 53 DED patients (106 eyes) diagnosed as per DEWS II criteria. Patients with tear hyperosmolarity (Group 1, n = 48 eyes) were compared with DED patients without tear hyperosmolarity (Group 2, n = 58 eyes). Of 53 patients (27 females), 28 had Sjogren's syndrome, and the rest had meibomian gland dysfunction. There were more SS patients (21 vs 7) and females in Group 1. The two groups were similar in age, TMH, NIBUT, meibomian gland loss, bulbar redness, and corneal staining, except for Schirmer I (p < 0.001), and tear osmolarity (p < 0.001; worse in group 1). The groups did not differ in dendritic cell density, whether immature (53.8 vs. 38) or mature (2.7 vs. 0). The significantly different corneal nerve parameters were nerve fiber length (p = 0.005), density (p = 0.01), and branching density (p = 0.04), with lower values observed in group 1. Only tear osmolarity had a weak negative correlation with corneal nerve fiber length (r, -0.38), density (r, -0.32), and branching (r, -0.28). SS patients with hyperosmolar tears had reduced nerve fiber length and branching compared to SS patients with normosmolar tears. Tear hyperosmolarity is associated with reduced nerve branching, fiber density, and fiber length despite similar levels of conjunctival congestion, tear film stability, and meibomian gland loss in DED patients. What is known • Corneal nerves are reduced in density and length in dry eye disease patients. • Laboratory studies have shown fragmentation of corneal nerves on exposure to hyperosmolar solutions. What is new • Tear hyperosmolarity is associated with reduced nerve branching, fiber density, and fiber length in dry eyes compared to normosmolar tears. • The effect is independent of dendritic cell density.