What is Peripheral Neuropathy? Peripheral neuropathy is damage of the peripheral nerves. Your peripheral nerves are the nerves that travel to your arms and legs. When the nerves are damaged, they don't function properly. People with peripheral neuropathy have decreased or abnormal sensation in their toes and fingers. Sometimes, they develop problems moving these parts of the body as well. Causes In the United States, the most common cause of peripheral neuropathy is diabetes.