Background Diabetic peripheral neuropathy (DPN) is a serious but potentially preventable complication of diabetes mellitus, particularly in individuals with vitamin B12 deficiency. Despite clinical guidelines, routine B12 screening remains inconsistent, and hospital-based data on deficiency patterns in DPN populations are scarce. This study evaluated the frequency and determinants of B12 deficiency among patients with DPN at a tertiary care center in Pakistan. Materials and methods We conducted a hospital-based cross-sectional study on 139 patients (ages 30-60 years old) with type 2 diabetes and confirmed DPN (Michigan Neuropathy Screening Instrument score ≥4) at Lady Reading Hospital, Peshawar (August 2022-March 2025). Patients taking prior B12 supplementation or with malabsorption disorders were excluded. We measured the serum B12 levels, defining the deficiency as less than 149 ng/L. We used a multivariable logistic regression model to identify the predictors of B12 deficiency, adjusting for age, gender, and diabetes duration. Results Vitamin B12 deficiency was prevalent in 48.2% (67/139) of participants. Moreover, it was significantly higher in older patients (54.7% in the 46-60 age group vs. 13.6% in the 30-45 age group, p < 0.001) and those with longer durations of diabetes (72.8% with >5 years vs. 13.8% with 1-5 years, p < 0.001). There was no statistically significant difference among genders (50.5% males vs. 42.9% females, p = 0.38). Analysis showed that being over 45 years old and having diabetes for more than 5 years are strong factors that predict vitamin B12 deficiency. Conclusions This study demonstrates a high burden of vitamin B12 deficiency among patients with DPN, which is strongly associated with age and duration of diabetes. Implementation of routine B12 screening protocols for patients with DPN, particularly those of old age or with prolonged duration of diabetes, may help prevent neurological deterioration in this vulnerable population.