Background: Acupuncture is commonly used in Traditional Chinese Medicine for treatment of diabetic peripheral neuropathy (DPN), but data from randomized controlled trials are rare. Methods: This randomized, placebo‐controlled, partially double‐blinded clinical trial randomly assigned adults with confirmed type 2 diabetes‐induced DPN to receive 10 sessions of needle acupuncture, laser acupuncture, or placebo laser acupuncture for 10 consecutive weeks. Treatment was provided at bilateral acupoints Ex‐LE‐10 (Bafeng), Ex‐LE‐12 (Qiduan), and ST‐34 (Lianqiu). Neurological assessments, including nerve conduction studies (NCS) of sural and tibial nerves, were performed at baseline and weeks 6 and 15. Primary outcome was delta of sural sensory nerve action potential (SNAP). Secondary outcomes included further NCS values, clinical scores, and patient‐reported outcome measures (PROMs). Results: Of 180 participants, 172 completed the study. Sural SNAP and sural and tibial nerve conduction velocities improved significantly after 10 treatments when comparing needle acupuncture to placebo. Needle acupuncture showed earlier onset of action than laser acupuncture. PROMs showed larger improvements following needle and laser acupuncture than placebo, reaching significant differences for hyperesthesia and cramps following needle acupuncture and for heat sensation following laser acupuncture. Conclusions: Classical needle acupuncture had significant effects on DPN. Improvement in NCS values presumably indicates structural neuroregeneration following acupuncture. [ABSTRACT FROM AUTHOR]