Cutaneous sensory nerves mediate inflammation and wound healing by releasing neuropeptides, such as substance P, which stimulates pro-inflammatory responses by keratinocytes, fibroblasts, and endothelial cells. The cell surface enzyme, neutral endopeptidase, degrades substance P, thereby regulating its biologic actions. We hypothesized that neutral endopeptidase enzymatic activity is increased in chronic wounds and skin from subjects with diabetes. We compared cutaneous neutral endopeptidase expression and enzymatic activity between normal controls and diabetic subjects with neuropathy and chronic wounds. Skin samples from subjects with diabetes were taken at the time of amputation for nonhealing ulcers. Skin taken from the ulcer margin, 1 cm from the ulcer (adjacent), and from the most proximal region of the amputated leg were studied. Skin biopsies from the leg of healthy control subjects were also studied. Neutral endopeptidase was localized by immunohistochemistry in all tissue sections. Neutral endopeptidase activity was measured using a fluorimetric assay. The median neutral endopeptidase activity of the ulcer margin was 1.21 x higher (p>0.2) than adjacent skin, 5.26 (p<0.001) than proximal skin, and 15.22 x higher (p<0.001) than control skin. Adjacent skin had a median neutral endopeptidase activity 4.34 x higher (p<0.001) than proximal skin and 12.58 x higher (p<0.001) than control skin. The median neutral endopeptidase activity of proximal skin was 2.90 x higher (p<0.001) than control skin. This elevated neutral endopeptidase activity in the skin and chronic ulcers of subjects with diabetes combined with peripheral neuropathy may contribute to deficient neuroinflammatory signaling and may impair wound healing in subjects with diabetes.