The etiologies of a variety of skin conditions associated with diabetes have not been fully explained. One possible etiological factor is diabetic microangiopathy, which is known to affect the eyes and kidneys in patients with diabetes. There are many mechanisms by which diabetes may cause microangiopathy. These include excess sorbitol formation, increased glycation end products, oxidative damage, and protein kinase C overactivity. All of these processes occur in the skin, and the existence of a cutaneous diabetic microangiopathy has been well demonstrated. These microangiopathic changes are associated with abnormalities of skin perfusion. Because the skin plays a thermoregulatory role, there is significant capillary redundancy in normal skin. In diabetic patients, loss of capillaries is associated with a decrease in perfusion reserve. This lost reserve is demonstrable under stressed conditions, such as thermal stimulation. The associated failure of microvascular perfusion to meet the requirements of skin metabolism may result in diverse skin lesions in patients with diabetes. Many skin conditions peculiar to diabetes are fairly rare. Necrobiosis lipoidica diabeticorum (NLD) and diabetic bullae occur very infrequently as compared with diabetic retinopathy and nephropathy. Conversely, there is a correlation between diabetic microvascular disease and NLD. This correlation also exists with more common skin conditions, such as diabetic dermopathy. This relationship suggests that diabetic microangiopathy may contribute to these conditions even if it is not primarily causal. Clinically, the major significance of diabetic cutaneous microangiopathy is seen in skin ulceration which is very common and has a major impact on diabetic patients. Many factors contribute to the development of diabetic foot ulcers. Neuropathy, decreased large vessel perfusion, increased susceptibility to infection, and altered biomechanics all play a role, but there is no doubt that inadequate small blood vessel perfusion is a major cause of the inability to heal small wounds that eventually results in ulcer formation. The accessibility of skin capillaries makes cutaneous diabetic microangiopathy an attractive model for research on the evolution of microvascular disease in diabetic patients.