Older people with diabetes mellitus (DM) may be at high risk of falling because of general risk factors for falls as well as disease-specific factors. To determine the prevalence of falls and to investigate lower-limb factors for falls in older people with DM. Methods Sixty patients with DM over 55 years of age were recruited. 'Fallers' were those who self-reported at least one fall in the previous year. In addition to diabetes status and demographic information, the following were assessed: neuropathy symptom score (NSS), neuropathy disability score (NDS), foot deformity score (FDS), Tinetti performance-oriented assessment of mobility (POMA), ankle muscle strength and gait parameters. Data from 'fallers' and 'non-fallers' were compared and logistic regression analysis performed to identify variables predictive of falls. Thirty-five per cent (n = 21) of participants had fallen in the preceding year. Compared with 'non-fallers', there was a greater incidence of peripheral neuropathy among 'fallers' (86% of 'fallers' and 56% of 'non-fallers'), higher vibration perception threshold (P = 0.04), slower gait velocity (P < 0.001), lower muscle strength for dorsiflexion, plantarflexion, inversion and eversion (all P < 0.001) and higher incidence of bony prominences and prominent metatarsal heads (both P < 0.001). There was a strong and significant correlation between dorsiflexion muscle strength and gait velocity. Logistic regression analysis determined that walking velocity, strength of ankle dorsiflexors and NSS accurately predicted 75% of 'fallers'. Simple clinical measures of gait velocity and ankle muscle strength may be used to identify people with DM at risk of falling, allowing preventative strategies to be implemented.