People with type 1 diabetes have an increased risk of developing microvascular complications, which have a negative impact on the quality of life and reduce life expectancy. Numerous studies in animals with experimental diabetes show that c-peptide supplementation exerts beneficial effects on diabetes-induced damage in peripheral nerves and kidneys. There is substantial evidence that c-peptide counteracts the detrimental changes caused by hyperglycemia at the cellular level, such as decreased activation of endothelial nitric oxide synthase and sodium potassium ATPase, and increase in formation of pro-inflammatory molecules mediated by nuclear factor kappa-light-chain-enhancer of activated B cells: cytokines, chemokines, cell adhesion molecules, vascular endothelial growth factor, and transforming growth factor beta. However, despite positive results from cell and animal studies, no successful c-peptide replacement therapies have been developed so far. Therefore, it is important to improve our understanding of the impact of c-peptide on the pathophysiology of microvascular complications to develop novel c-peptide-based treatments. This article aims to review current knowledge on the impact of c-peptide on diabetic neuro- and nephropathy and to evaluate its potential therapeutic role.