The purpose of this study was to investigate the protective role of peroxisome proliferator–activated receptor α (PPARα) against diabetic keratopathy and corneal neuropathy. Corneal samples were obtained from human donors with and without diabetes. Streptozotocin-induced diabetic rats and mice were orally treated with PPARα agonist fenofibrate. As shown by immunohistochemistry and Western blotting, PPARα was downregulated in the corneas of humans with diabetes and diabetic rats. Immunostaining of β-III tubulin demonstrated that corneal nerve fiber metrics were decreased significantly in diabetic rats and mice, which were partially prevented by fenofibrate treatment. As evaluated using a Cochet-Bonnet aesthesiometer, corneal sensitivity was significantly decreased in diabetic mice, which was prevented by fenofibrate. PPARα–/– mice displayed progressive decreases in the corneal nerve fiber density. Consistently, corneal sensitivity was decreased in PPARα–/– mice relative to wild-type mice by 21 months of age. Diabetic mice showed increased incidence of spontaneous corneal epithelial lesion, which was prevented by fenofibrate while exacerbated by PPARα knockout. Western blot analysis revealed significantly altered neurotrophic factor levels in diabetic rat corneas, which were partially restored by fenofibrate treatment. These results indicate that PPARα protects the corneal nerve from degeneration induced by diabetes, and PPARα agonists have therapeutic potential in the treatment of diabetic keratopathy.