Diabetic retinopathy (DR) remains the leading cause of blindness in the working-age population. Its progression causes gradual damage to corneal nerves, resulting in decreased corneal sensitivity (CS) and disruption of anterior-eye-surface homeostasis, which is clinically manifested by increased ocular discomfort and dry eye disease (DED). This study included 52 DR patients and 52 sex- and age-matched controls. Ocular Surface Disease Index (OSDI) survey, tear film-related parameters, CS, and in vivo corneal confocal microscopy (IVCM) of the subbasal plexus were performed. Furthermore, all patients underwent tear sampling for neurotrophin and cytokine analysis. OSDI scores were greater in DR patients than in controls ( = 0.00020). No differences in the Schirmer test score, noninvasive tear film-break-up time (NIBUT), tear meniscus or interferometry values, bulbar redness, severity of blepharitis or meibomian gland loss were found. In the DR group, both the CS ( < 0.001), and the scotopic pupil diameter ( = 0.00008) decreased. IVCM revealed reduced corneal nerve parameters in DR patients. The stage of DR was positively correlated with the OSDI (Rs = +0.51, 95% CI: + 0.35-+0.64, < 0.001) and negatively correlated with IVCM corneal nerve parameters and scotopic pupillometry (Rs = -0.26, 95% CI: -0.44--0.06, = 0.0097). We found negative correlations between the OSDI and IVCM corneal innervation parameters. The DR group showed lower tear film-brain-derived neurotrophic factor (BDNF) levels ( = 0.0001) and no differences in nerve growth factor (NGF)-β, neurotrophin (NT)-4, vascular endothelial growth factor (VEGF), interleukin (IL)-1β, IL-4, IL-5, IL-6, or IL-12 concentrations. Tumor necrosis factor (TNF)-α, IL-2, IL-8, IL-10, granulocyte macrophage colony-stimulating factor (GM-CSF), and interferon (IFN)-γ levels were decreased among patients with DR. Corneal innervation defects have a direct impact on patients' subjective feelings. The evolution of DR appears to be associated with corneal nerve alterations, emphasizing the importance of IVCM.