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Objective This article investigates the role of chronic nerve compression in the progression of diabetic peripheral neuropathy (DPN) by gene expression profiling. Methods Chronic nerve compression was created in streptozotocin (STZ)‐induced diabetic rats by wrapping a silicone tube around the sciatic nerve (SCN). Neurological deficits were evaluated using pain threshold test, motor nerve conduction velocity (MNCV), and histopathologic examination. Differentially expressed genes (DGEs) and metabolic processes associated with chronic nerve compression were analyzed. Results Significant changes in withdrawal threshold and MNCV were observed in diabetic rats 6 weeks after diabetes induction, and in DPN rats 4 weeks after diabetes induction. Histopathologic examination of the SCN in DPN rats presented typical changes of myelin degeneration in DPN. Function analyses of DEGs demonstrated that biological processes related to inflammatory response, extracellular matrix component, and synaptic transmission were upregulated after diabetes induction, and chronic nerve compression further enhanced those changes. While processes related to lipid and glucose metabolism, response to insulin, and apoptosis regulation were inhibited after diabetes induction, chronic nerve compression further enhanced these inhibitions. Conclusion Our study suggests that additional silicone tube wrapping on the SCN of rat with diabetes closely mimics the course and pathologic findings of human DPN. Further studies are needed to verify the effectiveness of this rat model of DPN and elucidate the roles of the individual genes in the progression of DPN.