Diabetes mellitus is a worldwide metabolic disorder that poses significant healthcare and financial issues due to its severe consequences and rising occurrence. Of them, diabetic neuropathy (DN) is a significant microvascular consequence characterized by damage to the nerves, resulting in incapacitating symptoms as tingling, numbness, and persistent pain. Morbidity rises and quality of life is severely reduced by DN. Recent data indicates that gut microbiota dysbiosis plays a crucial part in the development of DN and points to intricate relationships between inflammation, immunological response, and host metabolism. Pharmaceuticals and nutraceuticals are part of the current treatment approaches for diabetes and DN, although they are frequently expensive and ineffective. As a result, natural products especially marine algae have drawn more attention as possible sources of bioactive substances with neuroprotective and antidiabetic effects. Carotenoids, phlorotannins, and astaxanthin are examples of algae metabolites that have anti-inflammatory, antioxidant, and glucose-regulating properties. They may also alter metabolic pathways linked to the pathophysiology of DN. Notably, Symphyocladia latiuscula and other red algae have demonstrated promise in neuroprotection. This chapter explores the pathophysiology of DN, risk factors, conventional management approaches, and the emerging role of marine algae in combating diabetes-induced neuropathy, while addressing current challenges and limitations in translating these findings into clinical applications.